You have two machines with different operating lives and you want to select the machine that incurs the lowest cost. The PV of costs of machine A is $47k over three years, while the PV of costs of machine B is $34k over two years. If the cost of capital is 6%, select the correct answer:

Multiple Choice Machine B is more efficient because its annuity factor is lower. Machine B is more efficient because its equivalent annual cost (EAC) is lower. Machine A is more efficient because its equivalent annual cost (EAC) is lower. Machine B is more efficient because it has a lower PV of costs. Machine A is more efficient because its annuity factor is lower.