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You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $135

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You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $135 initially, and then $120 per year in maintenance costs Machine B costs $205 initially, has a life of three years, and requires $155 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine. The discount rate is 13 percent and the tax rate is zero. Calculate the EAC Which one should you choose? Machine B Machine A

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