Different milling machines to replace current aging machine

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Reference no: EM131981364

1. For a present value of $500, create a table that shows the FV at 0%, 5%, and 10% for 0, 1, 2, 3, 4, and 5 years.

2. In a single plot, graph the tables created in part D with years on the horizontal axis and FV on the vertical axis for each interest rate and be sure to label the y-axis, x-axis, chart title, and legend.

3. You are evaluating two different milling machines to replace your current aging machine. Machine A costs $245878, has a three-year life, and has pretax operating costs of $64770 per year. Machine B costs $387055, has a five-year life, and has pretax operating costs of $30018 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $38368. Your tax rate is 34 % and your discount rate is 10 %.

What is the EAC for Machine A?

Reference no: EM131981364

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