Question: Problem 6-10 Calculating EAC You are evaluating two different silicon wafer milling machines. The Techron I costs $216,000, has a three-year life, and has pretax

Problem 6-10 Calculating EAC

You are evaluating two different silicon wafer milling machines. The Techron I costs $216,000, has a three-year life, and has pretax operating costs of $55,000 per year. The Techron II costs $380,000, has a five-year life, and has pretax operating costs of $28,000 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $32,000. If your tax rate is 35 percent and your discount rate is 10 percent, compute the EAC for both machines. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

	EAC
Techron I	$
Techron II	$

Which do you prefer?

	Techron I
	Techron II

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