You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $69,500, has a 5-year life, and has an annual OCF (after- tax) of -$11,200 per year. The Keebler CookieMunster costs $96,000, has a 7-year life, and has an annual OCF (after-tax) of -$9,200 per year. If your discount rate is 12 percent, what is each machine's EAC? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Pillsbury 707 Keebler CookieMunster EAC

Principles of Accounting Volume 2
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ISBN:9781947172609
Author:OpenStax
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Chapter11: Capital Budgeting Decisions
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Problem 5EB: A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment...
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You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $69,500, has a 5-year life, and has an annual OCF (after-
tax) of -$11,200 per year. The Keebler CookieMunster costs $96,000, has a 7-year life, and has an annual OCF (after-tax) of -$9,200
per year.
If your discount rate is 12 percent, what is each machine's EAC? (Negative amounts should be indicated by a minus sign. Round your
answers to 2 decimal places.)
Pillsbury 707
Keebler CookieMunster
EAC
Transcribed Image Text:You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $69,500, has a 5-year life, and has an annual OCF (after- tax) of -$11,200 per year. The Keebler CookieMunster costs $96,000, has a 7-year life, and has an annual OCF (after-tax) of -$9,200 per year. If your discount rate is 12 percent, what is each machine's EAC? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Pillsbury 707 Keebler CookieMunster EAC
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ISBN:
9781947172609
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OpenStax
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