Ashley Foods, Inc. has determined that only one of five machines can be used in one phase of its dairy products operation. The first and annual costs are estimated; all machines are expected to have a 4-year useful life. If the MARR is 20% per year, determine which machine should be selected on the basis of rate of return.

Machine First Cost, $ AOC, $ per year 1 31,000 16,000 2 29,000 19,300 3 34,500 17,000 4 49,000 12,200 5 41,000 15,500