Question: You are evaluating two different stamping machines. The Stamper I costs $232158, has a three-year life, and has pretax operating costs of $30,000 per year.

You are evaluating two different stamping machines. The Stamper I costs $232158, has a three-year life, and has pretax operating costs of $30,000 per year. The Stamper Il costs $200,000, has a five-year life, and has pretax operating costs of $45,000 per year. For both machines, use straight-line depreciation to zero over the project's life and assume a market salvage value of $20,000. If your tax rate is 35 percent and your discount rate is 10 percent, compute the EAC for both machines. Which do you prefer? Select one: a. Choose Stamper II, since Stamper l's EAC is $49210.29, which is lower than EAC of Stamper II b. Choose Stamper I, since its EAC is $49210.29, which is higher than EAC of Stamper II c. Choose Stamper I, since its EAC is $81841.58, which is lower than EAC of Stamper II d. Choose Stamper II, since Stamper l's EAC is $81841.58, which is higher than EAC of Stamper

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