Y6

13. Dammam Plastics is considering two machines. Both machines can be used to do the same job, and thus only one of them is needed. . Machine A: Its initial price is 12,000 SR, its salvage value (at the end of year 5) is 3,000 SR, and its annual operating cost is 1,000 SR. Machine B: Its initial price is 10,000 SR, its salvage value (at the end of year 3) is 1,000 SR, and its annual operating cost is 1,200 SR. Both machines will be available again at the above cost and benefits if repetition is needed. Assuming an infinite required service period, which of the following statements is true using the present equivalent cost criterion if the company's MARR is 15%? a. Machine A is a better choice b. Machine B is a better choice c. Both machines have the same present equivalent cost d. Cannot answer this question without information about the revenues