Compute the eac for both machines

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Reference no: EM13300371

You are evaluating two different silicon wafer milling machines. The Techron I costs $ 330,000, has a 3 year life, and has pretax operating costs of $ 41,000 per year. The Techron II costs $ 480,000, has a 5 year life, and has pretax operating costs of $ 33,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $ 20,000. If your tax rate is 35 % and your discount rate is 14 %, compute the EAC for both machines. Which do you prefer? Why?

Reference no: EM13300371

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