Problem $10-19$ Calculating EAC $[$LO$4]$

You are evaluating two different silicon wafer milling machines. The Techron I costs

$$282,000,$ has a three$-$year life, and has pretax operating costs of $$77,000$ per year. The

Techron II costs $$490,000,$ has a five$-$year life, and has pretax operating costs of

$$44,000$ per year. For both milling machines, use straight$-$line depreciation to zero over

the project's life and assume a salvage value of $$54,000.$ If your tax rate is $23$ percent

and your discount rate is $10$ percent, compute the EAC for both machines. $($A negative

answer should be indicated by a minus sign. Do not round intermediate calculations

and round your answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Which machine do you prefer?

Techron II

Techron I