Question: You are evaluating two different silicon wafer grinding machines. Model I sells for $240,000 with a 3-year life and adds $63,000 per year in pretax

You are evaluating two different silicon wafer grinding machines. Model I sells for $240,000 with a 3-year life and adds $63,000 per year in pretax operating costs: Model I sells for $420,000 with a 5-year life and adds $36,000 per year in pretax operating costs cost. Both are depreciated over the project's life using the straight-line method, assuming a salvage value of $40,000 at the end of the project. If the tax rate is 35% and the discount rate is 10%, calculate the EAC for both. Which one would you choose? Why?

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