5. A firm is considering the purchase of one of two machines to replace an existing one. Machine A will cost GBP 16,000 and has a three-year life. Annual net cash flows are expected to be GBP 7,200, beginning one year after the machine is purchased. Machine B will cost GBP 30,000 and has a seven-year life. Annual net cash flows are expected to be GBP 7,500, beginning one year after the machine is purchased. If the firm's cost of capital is a constant 14% forever, which machine should it buy? Assume there is no value to flexibility as these machines will continue to be manufactured. Which of the following statements is incorrect? The NPV of Machine A is less than the NPV of Machine B Machine B has a higher equivalent annual cash flow (or equivalent rental value) than Machine A Machine B has an equivalent annual cash flow (or equivalent rental value) greater than GBP 400 Machine A has an equivalent annual cash flow (or equivalent rental value) greater than GBP 400 Machine B has an equivalent annual cash flow (or equivalent rental value) that is more than GBP 150 per year higher than Machine A (to the nearest pound).