Two Machines, a and B, Which Perform the Same Functions

Multiple Choice

Two machines, A and B, which perform the same functions, have the following costs and lives.

Which machine would you choose? The two machines are mutually exclusive and the cost of capital is 15 percent.

A) Machine A, because the EAC is $1,789.89
B) Machine B, because the EAC is $1,922.88
C) Machine A, because it has lower PV costs
D) Machine B, because it has longer life