Two machines, A and B, which perform the same functions, have the following present value of costs and lives.

type PV cost life

machine A $6000 5

machine B $8000 7

Which machine would you choose? The two machines are mutually exclusive and the cost of capital is 10%.

Select one:

A.

Machine B because the EAC is -$1,643.24

B.

Machine B because it's NPV is higher than Machine A

C.

Machine A because the EAC is -$1582.78

D.

Machine A because the EAC -2,110.38

E.

Machine B because the EAC is -$1,232.43