Evaluating two different silicon wafer milling machines

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Reference no: EM13727186

You are evaluating two different silicon wafer milling machines. The Techron I costs $228,000, has a three-year life, and has pre-tax operating costs of $59,000 per year. The Techron II costs $400,000, has a five-year life, and has pre-tax operating costs of $32,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $36,000. If your tax rate is 34 percent and your discount rate is 8 percent, compute the EAC for both machines.

EAC

Techron I $

Techron II $

Reference no: EM13727186

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