3. The company is choosing between machine A and B (they are mutually exclusive and the company can only pick one). The initial cost of machine A is $400,000 and it will last for 7 years before it needs to be replaced. The cost of operating machine A each year is $40,000. The initial cost of Machine B is $220,000 and it will last for 5 years before it needs to be replaced. The cost of operating machine B is S60,000 in cash flow per year. If the required rate of return is 8%, (a) Calculate the 7 year and 5 year annuity factors at 8% annual interest. (b) Using the annuity factors, find the PV of Machine A and Machine B including all costs (initial+ operating) (c) Which machine is a better choice for the company after considering the different lives of the projects? (Note: be sure to use the equivalent annual annuity method)