You are evaluating two different silicon wafer milling machines. The Techron I cost $249,000, has a 3-year life, and has pretax operating costs of $66,000 per year. Th Techron Il costs $435,000, has a 5-year life, and has pretax operating costs of $39,00 per year. For both milling machines, use straight-line depreciation to zero over th project's life and assume a salvage value of $43,000. If your tax rate is 22 percent an your discount rate is 11 percent, compute the EAC for both machines. (A negativ answer should be indicated by a minus sign. Do not round intermediate calculation and round your answers to 2 decimal places, e.g., 32.16.) Techron I Techron II Which machine do you prefer? O Techron I Techron II
You are evaluating two different silicon wafer milling machines. The Techron I cost $249,000, has a 3-year life, and has pretax operating costs of $66,000 per year. Th Techron Il costs $435,000, has a 5-year life, and has pretax operating costs of $39,00 per year. For both milling machines, use straight-line depreciation to zero over th project's life and assume a salvage value of $43,000. If your tax rate is 22 percent an your discount rate is 11 percent, compute the EAC for both machines. (A negativ answer should be indicated by a minus sign. Do not round intermediate calculation and round your answers to 2 decimal places, e.g., 32.16.) Techron I Techron II Which machine do you prefer? O Techron I Techron II
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:You are evaluating two different silicon wafer milling machines. The Techron I cost
$249,000, has a 3-year life, and has pretax operating costs of $66,000 per year. Th
Techron II costs $435,000, has a 5-year life, and has pretax operating costs of $39,00
per year. For both milling machines, use straight-line depreciation to zero over th
project's life and assume a salvage value of $43,000. If your tax rate is 22 percent an
your discount rate is 11 percent, compute the EAC for both machines. (A negativ
answer should be indicated by a minus sign. Do not round intermediate calculation
and round your answers to 2 decimal places, e.g., 32.16.)
Techron I
Techron II
Which machine do you prefer?
Techron I
Techron II
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