A firm is considering the purchase of one of two machines to replace an existing one. MachineA will cost GBP 18,000 and has a four-year life. Annual net cash flows are expected to be GBP7,200, beginning one year after the machine is purchased. Machine B will cost GBP 26,000and has a six-year life. Annual net cash flows are expected to be GBP 7,500, beginning oneyear after the machine is purchased. Assume the firm's cost of capital is a constant 15%forever, and there is no value to flexibilityas these machines will continue to be manufactured

Which of the following statements is incorrect?

a)The NPV of Machine A is greater than the NPV of Machine B

b)Machine B has a lower equivalent annual cash flow (or equivalent rental value) thanMachine A

c)Machine B has an equivalent annual cash flow (or equivalent rental value) greater than GBP700

d)Machine A has an equivalent annual cash flow (or equivalent rental value) greater than GBP700

e)Machine B has an equivalent annual cash flow (or equivalentrental value) that is less thanGBP 2000 per year higher than Machine A (to the nearest pound).