Question: You are evaluating two different milling machines to replace your current aging machine. Machine A costs $ 2 3 6 , 2 4 4 ,

You are evaluating two different milling machines to replace your current aging machine. Machine A costs $236,244, has a three-year life, and has pretax operating costs of $67,855 per year. Machine B costs $417,560, has a five-year life, and has pretax operating costs of $32,660 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $35,626. Your tax rate is 34% and your discount rate is 10%.
What is the EAC for Machine A?

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