Michael's, Inc. is analyzing two machines to determine which one it should purchase (owning one of these machines is required by law). The company requires a 14% rate of return. Machine A has a cost of $290,000, annual after-tax operating costs of $8,000, and a 3-year life. Machine B costs $180,000, has annual after-tax operating costs of $12,000, and has a 2-year life. Whichever machine is purchased will be replaced at the end of its useful life. Which machine should Michael's purchase and why?

Please explain without the use the annuity tables.

A.Machine A; because it will save the company about $8,600 a year

B.Machine A; because it will save the company about $132,912 a year

C.Machine B; because it will save the company about $200,000 a year

D.Machine B; because it will save the company about $11,600 a year

E.Machine B; because its equivalent annual cost is $199,759