A small manufacturing firm is considering the purchase of a new machine to modernize one of its current production lines. Two types of machines are available on the market. The lives of Machine A and Machine B are five years and ten years, respectively, but the firm does not expect to need the service of either machine for more than ten years. The machines have the following expected receipts and disbursements: Trem Machine A Machine B Initial cost $10,000 $15,000 Service life 10 years Salvage value $1,000 $1,500 Annual O&M costs S600 $350 5 years The firm has the policy of reusing the same machine type when its end life is reached. What is the type of these projects? Which machine appears to be the best at i = 10% per year? 1) based on the PW. 2) based on the AEC. Projects Type: 6 A PW_A (10%) = PW_B (10%) = AECA (10%) - AEC_B (10%)