Problem $6-12$ Calculating EAC

$1\mathrm{.}36$ You are evaluating two different silicon wafer milling machines. The Techron I costs

points $$270,000,$ has a $3-$year life, and has pretax operating costs of $$73,000$ per year. The

Techron II costs $$470,000,$ has a $5-$year life, and has pretax operating costs of $$46,000$

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

project's life and assume a salvage value of $$50,000.$ If your tax rate is $24$ 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$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.

Which machine do you prefer?

Techron II

Techron $1$