As an Intern you are asked to carry out an evaluation in your department on two equipment. Equipment A costs $300 000 and has three-year life. The annual cash operating costs (excluding depreciation) is $72 000 per year. Equipment B costs $500 000, has a five year life with the annual cash operating costs of $45 000 per year. For both equipment, straight-line depreciation is used. The resulting book value will be zero for both machines but the salvage value is around 10% of the purchase price (e.g. this is the estimated market value). The tax rate is 30% and the cost of capital is 10%. Evaluate the after-tax cash flows for both alternatives and find the best alternative by considering equivalent annuities (more precisely equivalent annual cost, EAC).