Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You are evaluating two different silicon wafer milling
machines. The Techron I costs $279,000, has a
three-year life, and has pretax operating costs of
$76,000 per year. The Techron Il costs $485,000, has
a five-year life, and has pretax operating costs of
$43,000 per year. For both milling machines, use
straight-line depreciation to zero over the project's
life and assume a salvage value of $53,000. If your
tax rate is 22 percent and your discount rate is
13 percent, compute the EAC for both machines. (A
negative answer should be indicated by a minus sign.
Do not round intermediate calculations and round
your answers to 2 decimal places, e.g., 32.16.)
Which machine do you prefer?
multiple choice
Techron I
Techron II
2:50 pm
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Transcribed Image Text:You are evaluating two different silicon wafer milling machines. The Techron I costs $279,000, has a three-year life, and has pretax operating costs of $76,000 per year. The Techron Il costs $485,000, has a five-year life, and has pretax operating costs of $43,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $53,000. If your tax rate is 22 percent and your discount rate is 13 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Which machine do you prefer? multiple choice Techron I Techron II 2:50 pm
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