You need to choose between two machines based on the following information: Machine 1 has a 3-year life, costs $350,000 with pre-tax operating costs of $75,000 per year. Machine 2 has a 5-year life, costs $500.000 with pre-tax operating costs of $37,500 per year. Both machines have a salvage value of $25,000 and are classed with a CCA rate of 20% per year. The company tax rate is 32% and the discount rate is 12%. a) What is the EAC? b) Which machine would you select as an investment?

Note: no excel use, please