The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs:

Year Machine A Machine B

$0$ $ $48,000$ $ $58,000$

$111,60011,200$

$211,60011,200$

$311,600+$ replace $11,200$

$411,200+$ replace

These costs are expressed in real terms.

Suppose you are Borstal$$s financial manager. If you had to buy one or the other machine and rent it to the production manager for that machine$$s economic life, what annual rental payment would you have to charge? Assume a $12\%$ real discount rate and ignore taxes.

Note: Do not round intermediate calculations. Enter your answers as a positive value rounded to $2$ decimal places.

Which machine should Borstal buy?

If there is steady $8\%$ per year inflation, what will be the annual rental payment for machine B for the second year?

Note: Enter your answer as a positive value rounded to $2$ decimal places.