A machine produces 1,000 units of product per day in an existing manufacturing operation. The machine has become obsolete due to tightened product quality standards. Two new replacement machines are being evaluated from an economic viewpoint. Replacement machine "A" will cost $15,000 and will produce the needed 1,000 units of product per day for the next three years with annual escalated dollar operating costs projected to be %6,000 in ear one, $7,000 in year two, and $8,000 in year three, with a $2,000 escalated dollar salvage value at the end of year three. Replacement machine "B" will cost $21,000 and can produce up to 1,500 units of product per day for the next three years with annual escalated dollar operating costs of $5,000 in each of years one, two, and three for either 1,000 or 1,500 units per day, with a $3,000 escalated dollar salvage value at the end of year three. depreciate both machines using 5-year life MACRS depreciation starting in time zero with half-year convention. Assume that other taxable income exists that will permit using all tax deductions in the year incurred. For an effective state and federal income tax rate of 25%, use present worth cost and breakeven cost per unit of service analysis, assuming 250 working days per year, for a minimum escalated dollar DCFROR of 20% to determine if machine "A" or "B" is economically best assuming:

A) No known use exists for the 500 units of product per day that machine "B" can produce.

B) Another division of the company can utilize the extra 500 units of product capacity per day of machine "B" capital costs, operating costs, depreciation, salvage value, and related tax effects.