Question: Problem 8-10 Calculating EAC You are evaluating two different silicon wafer milling machines. The Techron I costs $225,000, has a three-year life, and has pretax

Problem 8-10 Calculating EAC

You are evaluating two different silicon wafer milling machines. The Techron I costs $225,000, has a three-year life, and has pretax operating costs of $58,000 per year. The Techron II costs $395,000, has a five-year life, and has pretax operating costs of $31,000 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $35,000. If your tax rate is 35 percent and your discount rate is 10 percent, compute the EAC for both machines. (Your answers should be a negative value and indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	EAC
Techron I	$
Techron II	$

Which machine should you choose?

Techron I

Techron II

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