A monopolistically competitive firm that earns an accounting profit in the short run: Select one: A. could earn an economic profit, break even or suffer an economic loss in the short run B. must also earn an economic profit in the short run C. could earn an economic profit or break even, but could not suffer an economic loss in the short run D. does not earn enough to earn an economic profit in the short run.

You are evaluating two different silicon wafer milling machines. the techron i costs $285,000, has a three-year life, and has pretax operating costs of $78,000 per year. the techron ii costs $495,000, has a five-year life, and has pretax operating costs of $45,000 per year. for both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $55,000. if your tax rate is 24 percent and your discount rate is 11 percent, compute the eac for both machines.

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