Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine...

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Vandalay Industries is considering the purchase of a new machinefor the production of latex. Machine A costs $1,840,000 and willlast for 4 years. Variable costs are 35 percent of sales, and fixedcosts are $129,000 per year. Machine B costs $4,290,000 and willlast for 7 years. Variable costs for this machine are 26 percent ofsales and fixed costs are $127,000 per year. The sales for eachmachine will be $8.58 million per year. The required return is 10percent and the tax rate is 35 percent. Both machines will bedepreciated on a straight-line basis.

Required:
(a)
If the company plans to replace the machine when it wears out ona perpetual basis, what is the EAC for machine A? (Do notround your intermediate calculations.)
(Click toselect)$-3,529,060$-7,782,863.74$-2,455,266.28$-3,900,540$3,121,733.72

(b)
If the company plans to replace the machine when it wears out ona perpetual basis, what is the EAC for machine B? (Do notround your intermediate calculations.)
(Click toselect)$-10,781,178.05$3,377,740.41$-10,706,916.79$-11,916,038.89$-2,199,259.59

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Vandalay Industries is considering the purchase of a new machinefor the production of latex. Machine A costs $1,840,000 and willlast for 4 years. Variable costs are 35 percent of sales, and fixedcosts are $129,000 per year. Machine B costs $4,290,000 and willlast for 7 years. Variable costs for this machine are 26 percent ofsales and fixed costs are $127,000 per year. The sales for eachmachine will be $8.58 million per year. The required return is 10percent and the tax rate is 35 percent. Both machines will bedepreciated on a straight-line basis. Required:(a)If the company plans to replace the machine when it wears out ona perpetual basis, what is the EAC for machine A? (Do notround your intermediate calculations.)(Click toselect)$-3,529,060$-7,782,863.74$-2,455,266.28$-3,900,540$3,121,733.72 (b)If the company plans to replace the machine when it wears out ona perpetual basis, what is the EAC for machine B? (Do notround your intermediate calculations.)(Click toselect)$-10,781,178.05$3,377,740.41$-10,706,916.79$-11,916,038.89$-2,199,259.59

(a)	If the company plans to replace the machine when it wears out ona perpetual basis, what is the EAC for machine A? (Do notround your intermediate calculations.)

	(Click toselect)$-3,529,060$-7,782,863.74$-2,455,266.28$-3,900,540$3,121,733.72

(b)	If the company plans to replace the machine when it wears out ona perpetual basis, what is the EAC for machine B? (Do notround your intermediate calculations.)

	(Click toselect)$-10,781,178.05$3,377,740.41$-10,706,916.79$-11,916,038.89$-2,199,259.59