An engineer uses an economic analysis to determine which of two different machines to purchase. All the machines that are being considered are capable of performing the same task. Assume that the minimun atractive rate of return is 12% compounded monthly, what is the annual worth (EAW) of the two machines? which is the best economic investment?

Machine X

Initial cost $8,000

Estimated life 3yr

Salvage value $1,000

Monthly mant cost $1,500

Monthly incomes $3,550

Machine Y

Initial cost $11,000

Estimated life 3yr

Salvage value $1,500

Monthly mant cost $1,475

Monthly incomes $3,475

1. EAWx = $1784.76, EAWy = $1646.83, x is the best investment
2. EAWx =$1784.76, EWAy = $1646.83, y is the best investment
3. EAWx =$807.53, EWAy = $669.51, x is the best investment
4. EAWx =$669.51, EAWy = $807.53, y is the best investment