You are evaluating two different silicon wafer milling machines. the techron i costs $261,000, has a three-year life, and has pretax operating costs of $70,000 per year. the techron ii costs $455,000, has a five-year life, and has pretax operating costs of $43,000 per year. for both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $47,000. if your tax rate is 35 percent and your discount rate is 9 percent, compute the eac for both machines

Techron I   $ 84,403.55

Techron II  $ 70,526.47

Explanation:

we will calculate the present worth for each millng machine and then the equivalent annual cost

Techron I

depreciation 261,000 - 47,000 = 214,000

214,000 / 3 = 71,333.33 depreciation per year

then we calcualte the tax shield:

71,333.33 x 35% = 24.966,67

70,000 operating cost:

tax shield for operating cost: 70,000 x 35% = 24,500

Annual cash outflow: 70,000 - 24,500 - 24,966.67 = 20,533.33

now we calculate the present value of a three years annuity of 20,533.33 discounted at 9%:

PV$51,975.9087

and the present value of the salvage value:

PV   36,292.62

Present worth:

261,000 + 51,975.91 - 36,292.62 = 276,683.29

last, we claculate the PTM of an annuity which present value is 276,683.29

Equivalent Annual Cost

PV  $276,683.29

time3

rate0.09

C  $ 84,403.554

For Techron II we do the same:

net operaing cost:

depreciation tax shield: (455,000 - 47,000)/5 x 0.35 = 28,560)

operating cost after-tax 43,000 x (1-.35 )                    = 27,950

net cash flow:  28,560 - 27,950 = 610 (is positive as the tax shield is greater than the operting cost)

present value of the cash inflow:

PV$2,372.6873

present value of salvage value

PV   30,546.78

Net Present value:

455,000 - 2,372.69 - 30,546,78 = 422080,53

Equivalent annual cost:

PV  $422,080.53

time5

rate0.09

C  $ 70,526.473

answer: b) the us is the leading importer but not the leading exporter.

extra info:

the u.s is the largest importer but it is not the largest exporter as china sits on the top of the table when it comes to leading exporters.

but u.s is not far from first,

they rank in 2nd globally as the worlds largest exporter.

happy to

pls mark as brainliest

borrow money from the government then pay the government back 5k