Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2,190,000 and will last for 7 years. Variable costs are 38 percent of sales, and fixed costs are $122,000 per year. Machine B costs $4,530,000 and will last for 11 years. Variable costs for this machine are 27 percent of sales and fixed costs are $73,000 per year. The sales for each machine will be $9.06 million per year. The required return is 10 percent and the tax rate is 35 percent. Both machines will be depreciated on a straight-line basis.


(a) If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine A? (Do not round your intermediate calculations.)


(b) If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine B? (Do not round your intermediate calculations.)

Please read the following announcement. We won't do your homework for you. If you'll attempt it, we will check it and tell you whether it's right or help you with what you don't understand. Thanks.

https://www.askmehelpdesk.com/financ...-b-u-font.html