14. Comparing Mutually Exclusive Projects Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs 2,100,000 and will last for six years. Variable costs are 35 percent of sales, and fixed costs are 150,000 per year. Machine B costs 4,500,000 and will last for nine years. Variable costs for this machine are 30 percent and fixed costs are 100,000 per year. The sales for each machine will be 9 million per year. The required return is 10 percent and the tax rate is 35 percent. Both machines will be depreciated on a straight-line basis. If the company plans to replace the machine when it wears out on a perpetual basis, which machine should you choose? ing cash flows on two mutually ex