Morgan Inc. is considering two new machines. Machine A will generate revenues of $130,000, have variable costs of $35,000, and fixed costs of $12,000. Machine B will generate revenues of $145,000, have variable costs of $70,000, and fixed costs of $12,000. Which machine should be selected and why?

Machine A because the variable costs are $35,000 lower.

Machine B because incremental revenue is $15,000 higher.

Either machine because the fixed expenses are the same.

Machine A because the incremental profit is $20,000 higher.