You need to choose between two machines based on the following information: Machine 1 has...
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You need to choose between two machines based on the following information: Machine 1 has a 4 year life, costs $322,500 with pre-tax operating costs of $64,500 per year. Machine 2 has a 3 year life, costs $425,250 with pre-tax operating costs of $39,600 per year. Both machines have a salvage value of $22,500 and are classed with a CCA rate of 18% per year. The company tax rate is 30% and the discount rate is 10%.
a) What is the EAC?
b) Which machine would you select as an investment?
Please help and show work thanks.
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