You are evaluating two different silicon wafer milling machines. The Techron I costs $285,000, has a three-year life, and has pretax operating costs of $46,000 per year. The Techron Il costs $395,000, has a five-year life, and has pretax operating costs of $49,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $25,000. Assume the tax rate is 35 percent and the discount rate is 11 percent. Requirement 1: Compute the EAC for both the machines. (Do not include the dollar signs ($). Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) EAC Techron I Techron II
You are evaluating two different silicon wafer milling machines. The Techron I costs $285,000, has a three-year life, and has pretax operating costs of $46,000 per year. The Techron Il costs $395,000, has a five-year life, and has pretax operating costs of $49,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $25,000. Assume the tax rate is 35 percent and the discount rate is 11 percent. Requirement 1: Compute the EAC for both the machines. (Do not include the dollar signs ($). Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) EAC Techron I Techron II
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 28P: Friedman Company is considering installing a new IT system. The cost of the new system is estimated...
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