You are trying to choose between purchasing one of two machines for a factory. Machine A costs $16,000 to purchase and has a three-year life. Machine B costs $17,700 to purchase but has a four-year life. Regardless of which machine you purchase, it will have to be replaced at the end of its operating life. Assume a marginal tax rate of 35 percent and a discount rate of 14 percent. Calculate the equivalent annual costs (EAC) of each machine.

Equivalent Annual Cost (EAC) of machine A $ ________________

Equivalent Annual Cost (EAC) of machine B $ ________________ Which machine should you choose? You should choose A or B.

Could you please use financial formulas in excel? Thank you