Solve the EAC for a machine that costs 72,500 and has a 5 year life span, annual operating cash flow (after-tax) of -$11,800 per year. the second machine costs $99000, has a 7 year life, annual OCF (after-tax) of -$9800 per year. discount rate is 12%. What are the machine's EAC?

Solve the EAC for a machine that costs 72,500 and has a 5 year life span, annual operating cash flow (after-tax) of -$11,800 per year. the second machine costs $99000, has a 7 year life, annual OCF (after-tax) of -$9800 per year. discount rate is 12%. What are the machine's EAC?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter14: Pricing Techniques And Analysis

Section: Chapter Questions

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Question

Solve the EAC for a machine that
costs 72,500 and has a 5 year life
span, annual operating cash flow
(after-tax) of -$11,800 per year.
the second machine costs
$99000, has a 7 year life, annual
OCF (after-tax) of -$9800 per year.
discount rate is 12%. What are the
machine's EAC?

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