1. Harper Corp. is interested in 2 machines. Machine A costs $32,000, lasts 5 years, and generates cash flows of 9500 annually for 5 years. A has an equivalent annual annuity (EAA) of $1903. Machine B costs $15,000, lasts 2 years and generates cash flows of $10,000 annually for 2 years. The cost of capital is 6%. Find the equivalent annual annuity for B.
2. Which machine should be chosen? Explain. 
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4. (Please show your work)

Answer rating: 100% (QA)

To find the equivalent annual annuity EAA for Machine B well use the formula for calculating the EAA ... View the full answer