Below are the costs and revenues of 2 alternatives for a machine. When the discount rate is 26.5% per year, determine which alternative is economically viable using the annual value method.

	1. Machine	2. Machine
Initial investment expense	$1,400,000	$1,170,000
Scrap price	$280,000	$175,500
First year value of annual operating expense	$60,000	$28,000
Annual increase rate of operating expenses	%23	%26
Annual revenue	$720,000	$630,000
Annual revenue change	8 years fixed, then descending linearly	7 years fixed, then geometricdecreasing
Annual reduction rate of revenues or quantity	$3,500	-%6
Economic Life	20 years	15 years

Below are the costs and revenues of 2 alternatives for a machine. When the discount rate is 26.5% per year, determine which alternative is economically viable using the annual value