Question: Honn Husk Company is choosing a machine between two models, Model C and Model D. The company can only choose one model as they are

Honn Husk Company is choosing a machine between two models, Model C and Model D. The company can only choose one model as they are mutually exclusive.

Model A : costs $800,000 now and will last for three years. After-tax cost of $20,000 per year

Model B : costs $700,000 now and will last for four years. After-tax cost of $70,000 per year after all relevant expenses.

Cash flows occur at the end of the year. The discount rate is 10 percent for the company. Ignore taxes and depreciation expenses.

1) Calculate the NPV for model A,B

2) Calculate the EAC for model A,B

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