Evaluating two different silicon wafer milling machines

Assignment Help Financial Management

Reference no: EM131983865

You are evaluating two different silicon wafer milling machines. The Techron I costs $270,000, has a three-year life, and has pretax operating costs of $73,000 per year. The Techron II costs $470,000, has a five-year life, and has pretax operating costs of $46,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $50,000. If your tax rate is 35 percent and your discount rate is 9 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

EAC

Techron I $

Techron II $

Reference no: EM131983865

Questions Cloud

How much more current value does perpetuity : How much more current value does a perpetuity of $230 a year have as compared to an annuity of $230 a year for 50 years given an interest rate of 8.3 percent?

EBITDA multiple based on your estimate of the value of firm : Calculate the Enterprise Value/EBITDA multiple based on your estimate of the value of the firm.

MACRS schedule-What is the NPV of the project : Assume the company has other profitable projects. MACRS schedule. What is the NPV of the project?

Arbitrage-free price of three-month forward contract : Calculate the arbitrage-free price of (i) a three-month forward contract on the stock and (i) a six-month forward contract on the stock.

Evaluating two different silicon wafer milling machines : You are evaluating two different silicon wafer milling machines. compute the EAC for both machines.

How might expectations of higher oil prices : How might expectations of higher oil prices affect the demand for loanable funds, and interest rates in the United States?

Hedge the euro foreign exchange rate risk : Should you buy or sell the Euro currency forward contract to hedge the Euro foreign exchange rate risk?

Calculate npv of the project : The real discount rate is 8 percent. The corporate tax rate is 34 percent. Calculate the NPV of the project.

What is the percentage return on the position : If the futures price of gold rises to $255, what is the percentage return on the position?

User Account

All Pages