Machines A and B are mutually exclusive and are expected to produce the following real cash flows. Calculate the equivalent annual cash flow from each machine and decide which machine you should buy. Assume the cost of capital is 5%.

c0 c1 c2 c3

machine a -100 110 121

machine b -120 110 121 13

(a) A: 67.59 / B: 66.23 / Choose A (b) A: 61.59 / B: 76.89 / Choose B (c) A: 33.54 / B: 37.46 / Choose B (d) A: 36.22 / B: 32.37 / Choose A