### Compute the eac for both machines

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##### Reference no: EM13738403

Problem:

You are evaluating two different silicon wafer milling machines. The Techron I costs \$219,000, has a three-year life, and has pretax operating costs of \$56,000 per year. The Techron II costs \$385,000, has a five-year life, and has pretax operating costs of \$29,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of \$33,000.

Required:

Question: If your tax rate is 34 percent and your discount rate is 8 percent, compute the EAC for both machines.

Note: Please describe comprehensively and provide step by step solution.

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