You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of 2 years, costs $100 initially, and then $150 per year in maintenance costs. Machine B costs $200 initially, has a life of 3 years, and requires $120 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine. Which is the better machine for the firm? The discount rate is 12% and the tax rate is zero.

a) Machine B

b) Both machines A and B

c) neither machine A nor B

d) Machine A