You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $160 initially, and then $95 per year in maintenance costs. Machine B costs $230 initially, has a life of three years, and requires $180 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine.

The discount rate is 11 percent and the tax rate is zero. Calculate the EAC.(Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Which one should you choose?

• Machine B
• Machine A