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You are evaluating two different silicon wafer milling machines. The Techron I costs $214,000, has a 3-year life, and has pretax operating costs of...
You are evaluating two different silicon wafer milling machines. The Techron I costs $214,000, has a 3-year life, and has pretax operating costs of $37,000 per year. The Techron II costs $328,000, has a 6-year life, and has pretax operating costs of $22,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $20,000. If your tax rate is 35 percent and your discount rate is 16 percent. The Techron I has an EAC of $_____ , while the Techron II has an EAC of $______ . You prefer Techron (choose: I or II)
