Question: Two machines, A and B, which perform the same functions, have the following costs and lives. Type Machine A Machine B PV Costs $6,000 $8,000

Two machines, A and B, which perform the same functions, have

Two machines, A and B, which perform the same functions, have the following costs and lives. Type Machine A Machine B PV Costs $6,000 $8,000 Life 5 yr 7 yr Which machine would you choose? The two machines are mutually exclusive and the cost of capital is 4 percent. Machine A, because it has lower PV costs Machine A, because the EAC is $1,348 Machine B, because it has longer life Machine B, because the EAC is $1,333

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