Question: 1-4 You have been asked to evaluate 2 pollution control devices. The wet scrub costs $100 to set up and $50 per year to operate.

1-4 You have been asked to evaluate 2 pollution control devices. The wet scrub costs $100 to set up and $50 per year to operate. It must be completely replaced every 3 years, and it has no salvage value. The dry scrub device costs $239 to set up and $40 per year to operate. It lasts for 5 years and has no salvage value. Assuming that pollution control equipment is replaced as it wears out, which device do you recommend if the cost of capital is 11%? What is its EAC?

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