TJ Enterprises is analyzing two machines to determine which one it should purchase. The company requires a rate of return of 15 percent and uses straight-line depreciation to a zero book value over the life of its equipment. Machine A has a cost of $312,000, annual operating costs of $24,500, and a four-year life. Machine B costs $610,000, has annual operating costs of $15,250, and has a six-year life. Whichever machine is purchased will be replaced at the end of its useful life. Part ii: What is the difference in the equivalent annual cost of the two machines?

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