You are trying to pick the least$-$expensive machine for your company. You have two choices: machine A$,$ which will cost $$100,000$ to purchase and which will have OCF of $-$$$7,000$ annually throughout the machine's expected life of three years; and machine $B,$ which will cost $$125,000$ to purchase and which will have OCF of $$2,600$ annually throughout that machine's four$-$year life. Both machines will be worthless at the end of their life. If you intend to replace whichever type of machine you choose with the same thing when its life runs out, again and again out into the foreseeable future, and if your business has a cost of capital of $15$ percent, using EAC which one should you choose?

Multiple Choice

Machine A

Machine B

All of these choices are correct.

Neither machine A nor B