Bruno SpA Is Analyzing Two Machines to Determine Which One

Bruno SpA is analyzing two machines to determine which one it should purchase.The company requires a 14% rate of return and uses straight-line depreciation to a zero book value.Machine A
Has a cost of €290,000, annual operating costs of €8,000, and a 3-year life.Machine B costs
€180,000, has annual 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 Bruno's purchase and
Why? (Round your answer to whole euros.)

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.