Calculate the Equivalent Annual Cost $($EAC$)$ for the following scenario:A company is considering purchasing a new machine. There are two options:Option $1$: Machine A has an initial cost of $$15000$ and will require annual maintenance of $$2600.$ Its expected lifespan is $5$ years.Option $2$: Machine B costs $$19000$ upfront but only needs $$1700$ in annual maintenance. Its expected lifespan is $8$ years.Assuming a discount rate of $0\mathrm{.}05,$ which machine should the company choose based on the lowest Equivalent Annual Cost?

What is the EAC for machine A

What is the EAC for machine B

Answer rating: 100% (QA)

Choosing the Machine with the Lowest Equivalent Annual Cost EAC We can calculate the EAC for each ma... View the full answer