Safeway Company is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 12 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $670,000, annual operating costs of $48,000, and a 8-year life. Machine B costs $390,000, has annual operating costs of $87,000, and a 5-year life. The firm currently pays no taxes. Which machine should be purchased and why?

		Machine A; because it will save the company about $9,625 a year
		Machine A; because it will save the company about $12,317 a year
		Machine B; because it will save the company about $10,536 a year
		Machine B; because it will save the company about $6,297 a year
		Machine B; because it will save the company about $4,815 a year