You are evaluating two different silicon wafer milling machines. the techron i costs $210,000, has a three-year life, and has pretax operating costs of $53,000 per year. the techron ii costs $370,000, has a five-year life, and has pretax operating costs of $26,000 per year. for both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $30,000. if your tax rate is 34 percent and your discount rate is 8 percent, compute the eac for both machines. (your answers should be a negative value and indicated by a minus sign. do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16.)

The EAC for Tachron 1 is -$86567.97  and The EAC for Techron 11 is  -$81293.85

Explanation:

           Techron I                                      PV Factor            PV

            Cost                        -2,10,000            1                   -210000.00

1to3  Tas saving On Dep     23,800            2.577               61334.91

             (210000/3)*.34

1to3 pretax operating costs  -34980         2.577        -90146.85

                = -53000*(1-0.34)

3Salvage value                   19800           0.7938             15717.88

          30000*.66

NPV                                                                                   -223094.07

EAC = -86567.97/2.577                                                           -86567.97

Therefore, The EAC for Tachron 1 is -$86567.97

Techron II                                                        PV Factor                      PV

Cost                             -370,000                    1                       -370000

1to3 Tas saving On Dep      25,160                   3.993              100456.58

          (370000/5)*.34

1to3pretax operating costs   -17160                  3.993               -68514.9

        =-26000*(1-0.34)

3Salvage value                    19800                0.6806           13475.547

          30000*.66

NPV                                                                                      -324582.8

EAC = -324582/3.993                                                               -81293.85

Therefore, The EAC for Techron 11 is  -$81293.85

answer; the correct answer is (direct foreign investment);

answer; ///i believe the correct answer is (c) laissez-faire;