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You are evaluating two different silicon wafer milling machines. The Techron I costs $264,000, has a...

You are evaluating two different silicon wafer milling machines. The Techron I costs $264,000, has a three-year life, and has pretax operating costs of $71,000 per year. The Techron II costs $460,000, has a five-year life, and has pretax operating costs of $44,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $48,000. If your tax rate is 34 percent and your discount rate is 8 percent, compute the EAC for both machines. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
EAC
  Techron I $   
  Techron II $   
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Answer #1

Techroni Calculation Techron II Calculation Year 0 1 2 3 cash flows -$264,000.00 $16,940.00 -$16,940.00 $14,740.00 (-71000*0.

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