Photon Control 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 11 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 $286,000, annual operating costs of $19,200, and a 4-year life. Machine B costs $194,000, has annual operating costs of $28,400, 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 $4,287 a year
		Machine A; because it will save the company about $3,760 a year
		Machine B; because it will save the company about $3,598 a year
		Machine B; because it will save the company about $2,198 a year
		Machine B; because it will save the company about $5,137 a year