A Business Can Purchase Machine "A" for $70,000

Multiple Choice

A business can purchase Machine "A" for $70,000. Cost per unit output would be $15. It could purchase Machine "B" for $127,000. Cost per unit would be $12. Both machines are depreciated on a straight-line basis over 10 years. The product retails for $20 and sells 40,000 units. If sales are expected to increase by 15% next year, which machine is the better financial choice?

A) Machine A as it has a lower price
B) Machine B as it has a lower unit cost
C) The machines provide the same financial equivalent
D) Machine A as it provides a higher income
E) Machine B as it provides a higher income