Saxon Manufacturing is considering purchasing two machines. Each machine costs $9,000 and will produce cash flows as follows. Saxon Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investments. The present value factors of 1 at 15% are: 1 year, 0.8696; 2 years, 0.7561; 3 years, 0.6575. Which machine should Saxon purchase?:

End of	Machine
Year	A	B
1	$5,000	$1,000
2	4,000	2,000
3	2,000	11,000

a. Only Machine A is acceptable.

b. Both machines are acceptable, but A should be selected because it has the greater net present value.

c. Only Machine B is acceptable.

d. Both machines are acceptable, but B should be selected because it has the greater net present value.