A company, which is financed entirely with common equity, plans to manufacture a new product. The product can be manufactured using either of the two machines, A or B. The price per unit will be $250 regardless of which machine is used to make it. The fixed and variable costs associated with the two machines are shown below, along with the capital (all equity) that must be invested to purchase each machine. The expected sales level is 25,000 units. The company has tax loss carry-forwards that will cause its tax rate to be zero for the life of the project. How much higher or lower will the project's ROE be if the machine with the higher ROE is selected instead of the machine with the lower ROE?

(All Figures in USD)	Machine A	Machine B
Fixed Costs	1,000,000	2,000,000
Variable Cost/Unit	200	150
Required Equity Investment	2,500,000	3,000,000