Managers of Sheridan Embroidery have decided to purchase a new monogram machine and are considering two alternative machines. The first machine costs $82,000 and is expected to last five years. The second machine costs $131,000 and is expected to last eight years. Assume that the opportunity cost of capital is 8 percent. What is the equivalent annual cost for each system? (Do not round intermediate calculations. Round final answers to 2 decimal places, e.g. 2.75.)

Equivalent Annual Cost

First machine $

Second machine $

Which machine should Sheridan Embroidery purchase?

Sheridan Embroidery should purchase themachine.

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