ou are evaluating two different silicon wafer milling machines. The Techron I costs $276,000, has a...

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ou are evaluating two different silicon wafer milling machines.The Techron I costs $276,000, has a three-year life, and has pretaxoperating costs of $75,000 per year. The Techron II costs $480,000,has a five-year life, and has pretax operating costs of $48,000 peryear. For both milling machines, use straight-line depreciation tozero over the project’s life and assume a salvage value of $52,000.If your tax rate is 21 percent and your discount rate is 12percent, compute the EAC for both machines.
A) Techron I? Techron II?
B) Which machine do you prefer? Techron I or Techron II

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The Aftertax salvage Value Aftertax salvage value 41080 52000 x 1 021 Equivalent Annual Cost EAC for Techron I Operating Cash Flow OCF Pretax Savings1 Tax Rate Depreciation x Tax Rate 750001 021 276000 3 Years x 021 59250 19320 39930 Net Present Value Period Annual Cash Flow Present Value factor at 12 Present Value of Cash Flow 1 39930 See Answer

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ou are evaluating two different silicon wafer milling machines.The Techron I costs $276,000, has a three-year life, and has pretaxoperating costs of $75,000 per year. The Techron II costs $480,000,has a five-year life, and has pretax operating costs of $48,000 peryear. For both milling machines, use straight-line depreciation tozero over the project’s life and assume a salvage value of $52,000.If your tax rate is 21 percent and your discount rate is 12percent, compute the EAC for both machines.A) Techron I? Techron II?B) Which machine do you prefer? Techron I or Techron II