Question: You are evaluating two different milling machines to replace your current aging machine. Machine A costs $280,650, has a three-year life, and has pretax operating
You are evaluating two different milling machines to replace your current aging machine. Machine A costs $280,650, has a three-year life, and has pretax operating costs of $70,050 per year. Machine B costs $377,017, has a five-year life, and has pretax operating costs of $34,695 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $37,540. Your tax rate is 34 % and your discount rate is 10 %. What is the EAC for Machine B? (Round answer to 2 decimal places. Do not round intermediate calculations).
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
