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23) ABC Inc.has a choice between two machines A and B. The company requires a return of 15% percent and uses straight-line depreciation to a

23) ABC Inc.has a choice between two machines A and B. The company requires a return of 15% percent and uses straight-line depreciation to a zero book value over a machine's life. Machine A has a cost of $300,000, annual operating costs of $9,000, and a life of 3 years. Machine B costs $225,000, has annual operating costs of $12,000, and a life of 2 years. Whichever machine is purchased will be replaced at the end of its useful life. Which machine should ABC purchase and why? Assume a tax rate of 21%.

Please show the calculations. Thank you in advance :)

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