Question: Your firm needs a computerized machine tool lathe which costs $50,000, and requires $12,000 in maintenance for each year of its 3 year life. After

Your firm needs a computerized machine tool lathe which costs $50,000, and requires $12,000 in maintenance for each year of its 3 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35% and a discount rate of 12%.

What is the projects EAC assuming the machine is worthless at the end of year 3?

a. $ 6,881

b. $12,049

c. $14,771

d. $22,715

e. $23,099

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