$19.$ You are considering two mutually exclusive projects with unequal lives. One of the projects has an up$-$front cost of $$45,000($CF$0=-45,000)$ and produces positive after$-$tax cash inflows of $$18,000$ a year at the end of each of the next $4$ years. Assuming the cost of capital is $9\mathrm{.}8\%,$ what is the equivalent annual annuity of the project?

Question $19$ options:

$$3,295$

$$3,865$

$$4,795$

$$5,365$

$$5,935$

$$6,775$

$20.$ There are two alternative machines for a manufacturing process. Both machines have the same output rate, but they differ in costs. Machine A costs $$20,000$ to set up and $$8,000$ per year to operate. It must be completely replaced every $3$ years, and it has no salvage value. Machine B costs $$50,000$ to set up and $$2,160$ per year to operate. It should last for $5$ years and has no salvage value. The costs of two machines are shown below.

$0$

$1$

$2$

$3$

$4$

$5$

Machine A

$20,000$

$8,000$

$8,000$

$8,000$

Machine B

$50,000$

$2,160$

$2,160$

$2,160$

$2,160$

$2,160$

Assuming the cost of capital is $10\%,$

$1.$ find the equivalent annual cost of Machine A in Box $1.$ Round it to a whole dollar, and no comma or the dollar sign.

$2.$ find the EAC of Machine B in Box $2.$ The same format as box $1.$

$3.$ Based on the equivalent annual cost method, type in Box $3$ which machine do you recommend, Machine A or Machine B$.$