Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2,260,000 and will last for 5 years. Variable costs are 37 percent of sales, and fixed costs are $178,000 per year. Machine B costs $4,440,000 and will last for 8 years. Variable costs for this machine are 27 percent of sales and fixed costs are $98,000 per year. The sales for each machine will be $8.88 million per year. The required return is 10 percent and the tax rate is 35 percent. Both machines will be depreciated on a straight-line basis.

Required:

(a)	If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine A? (Do not round your intermediate calculations.)
	(Click to select) $-10,194,647.42 $-4,570,797 $3,082,677.69 $-2,689,322.31 $-4,135,483

(b)	If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine B? (Do not round your intermediate calculations.)
	(Click to select) $3,511,858.56 $-2,260,141.44 $-12,057,687.77 $-8,387,777.19 $-9,270,701.1