47. DelRay Foods must purchase a new gumdrop machine. Two machines are available.

Machine 7745 has a fi rst cost of $10,000, an estimated life of 10 years, a salvage value of $1,000, and annual operating costs estimated at $0.01 per 1,000 gumdrops. Machine A37Y has a fi rst cost of $8,000, a life of 10 years, and no salvage value. Its annual operating costs will be $300 regardless of the number of gumdrops produced. MARR is 6%/yr and 30 million gumdrops are produced each year. Based on an internal rate of return analysis, which machine should be recommended?