A company is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 13 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $470,000, annual operating costs of $30,200, and a 6-year life. Machine B costs $302,000, has annual operating costs of $55,400, and a 4-year life. The firm currently pays no taxes. Which machine should be purchased and why?

		Machine A; because it will save the company about $9,159 a year
		Machine A; because it will save the company about $11,207 a year
		Machine B; because it will save the company about $7,463 a year
		Machine B; because it will save the company about $5,860 a year
		Machine A; because it will save the company about $6,235 a year