Calculate the eac for machine a-renegade industries

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Renegade Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2.97 million and will last for six years. Variable costs are 34% of sales, and fixed costs are $1,977,215 per year. Machine B costs $4.91 million and will last for nine years. Variable costs for this machine are 22% of sales and fixed costs are $1,409,662 per year. The sales for each machine will be $10.2 million per year. The required return is 10 %, and the tax rate is 38%. Both machines will be depreciated on a straight-line basis. The company plans to replace the machine when it wears out on a perpetual basis.

Calculate the EAC for machine A.

Reference no: EM132693228

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