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Calculate the EAC

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Reference no: EM132775124

Question - You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $155 initially, and then $100 per year in maintenance costs. Machine B costs $225 initially, has a life of three years, and requires $175 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine. The discount rate is 12 percent and the tax rate is zero. Calculate the EAC.

Reference no: EM132775124

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