1. You are evaluating two different silicon wafer milling machines (machine A and machine B). Each machine has its own economic life, initial costs, and annual operating cost. You are trying to use EAC to decide which machine to choose. After a thorough analysis of each machine. You have calculated that the present value of machine A to be -300,400, and that of machine B to be -460,800. Machine A has 4 years of life while machine B has 6 years of life. Assume discount rate is 14%.

(1) what is the EAC for each machine? (4 points)

(2) which machine should you choose and why? (2 points)