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How do find and calculate the eac

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Reference no: EM132768983

You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $155 initially, and then $100 per year in maintenance costs. Machine B costs $225 initially, has a life of three years, and requires $175 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine.

Problem 1: The discount rate is 12 percent and the tax rate is zero. Calculate the EAC. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Reference no: EM132768983

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