Home / Questions / Office Automation Inc must choose between two copiers the XX40 or the RH45 The XX40 costs ...
Office Automation, Inc., must choose between two copiers, the XX40 or the RH45. The XX40 costs $1,600 and will last for 3 years. The copier will require a real aftertax cost of $190 per year after all relevant expenses. The RH45 costs $2,100 and will last 4 years. The real aftertax cost for the RH45 will be $165 per year. All cash flows occur at the end of the year. The inflation rate is expected to be 5 percent per year, and the nominal discount rate is 10 percent.
Calculate the EAC for each copier. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 
EAC  
XX40  $  
RH45  $  
Which copier should the company choose?  

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