Question: 30. Calculating EAC (L07) You are evaluating two different silicon wafer milling machines. The Techron I costs $270,000, has a three-year life, and has pre-tax

30. Calculating EAC (L07) You are evaluating two different silicon wafer

30. Calculating EAC (L07) You are evaluating two different silicon wafer milling machines. The Techron I costs $270,000, has a three-year life, and has pre-tax operating costs of $69,000 per year. The Techron II costs $475,000, has a five-year life, and has pre-tax operating costs of $36,000 per year. Both milling machines are in Class 8 (CCA rate of 20% per year). Assume a salvage value of $45,000. If your tax rate is 35% and your discount rate is 10%, compute the EAC for both machines. Which do you prefer? Why? 30. Calculating EAC (L07) You are evaluating two different silicon wafer milling machines. The Techron I costs $270,000, has a three-year life, and has pre-tax operating costs of $69,000 per year. The Techron II costs $475,000, has a five-year life, and has pre-tax operating costs of $36,000 per year. Both milling machines are in Class 8 (CCA rate of 20% per year). Assume a salvage value of $45,000. If your tax rate is 35% and your discount rate is 10%, compute the EAC for both machines. Which do you prefer? Why

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