mutually exclusive machines. The firm uses straight line depreciation method for both machines. (50 Points) #2 A company with an effective income tax rate of 40% and a MARR of 15% must choose between two Initial cost Uniform annual benefit Depreciation life Useful life Machine 1 $100,000 $45,000 4 years 5 years $20,000 Machine 2 $150,000 $60,000 3 years 4 years $40,000 Actual market value at the end of useful life a. Determine which machine should be chosen. (25 p) b. Calculate the after-tax internal rate of return of machine 2. (25 p)