Question: You are evaluating two different milling machines to replace your current aging machine. Machine A costs $234,325, 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 $234,325, has a three-year life, and has pretax operating costs of $71,009 per year. Machine B costs $388,417, has a five-year life, and has pretax operating costs of $32,637 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $41,737. Your tax rate is 34 % and your discount rate is 10 %.

What is the EAC for Machine A?

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