mb

You are considering the purchase of one of two machines required in your production process. Machine A has a life of five years. Machine A costs $50,000 initially and then $70,000 per year in maintenance. Machine B has an initial cost of $90,000. It requires $40,000 in maintenance for each year of its ten-year life. Either machine must be replaced at the end of its life. The opportunity cost of capital is 15% and the tax rate is zero. Which is the better machine to purchase? Select one: . Machine B, which has an Equivalent Annual Cost of $57 933. Ob Machine A, which has a PV of costs of $284,651. OC Machine B, which has a PV of costs of $284,651. Od Machine A, which has an Equivalent Annual Cost of $57,933