Diebold, Inc. is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 12 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $284,000, annual operating costs of $18,320, and a 4-year life. Machine B costs $213,000, has annual operating costs of $27,800, and a 3-year life. The firm currently pays no taxes. Which machine should be purchased and why?

		Machine A; because it will save the company about $4,660 a year
		Machine A; because it will save the company about $3,917 a year
		Machine B; because it will save the company about $7,420 a year
		Machine B; because it will save the company about $5,326 a year
		Machine B; because it will save the company about $3,875 a year