(EAC) Kudla Corporation is considering two alternative machines. Machine A will cost $50,000, have expenses (excluding depreciation) of $34,000 per year, and have a useful life of six years. Machine B will cost $70,000, have a useful life of five years, and will have expenses (excluding depreciation) of $26,000 per year. The firm uses straight-line depreciation and pays taxes at the rate of 35%. The project's cost of capital is 13%. Net salvage value is zero for each machine at the end of its useful life. Assuming the project for which machine will be used is profitable, which machine should be purchased?

Possible answers are:

purchase A, it has a lower EAC of $32,728
		purchase A, it has a lower EAC of $31,952
		purchase A, it has a lower EAC of $31,902
		purchase A, it has a lower EAC of $31,691
		purchase B, it has a lower EAC of $32,528
		purchase B, it has a lower EAC of $31,822
		purchase B, it has a lower EAC of $31,691
		purchase B, it has a lower EAC of $31,302