Two alternative machines are being considered for a manufacturing process. Machine A has an initial cost of $75,200, and its estimated salvage value at the end of its six years of service life is $21,000. The operating costs of this machine are estimated to be $6,800 per year. Extra income taxes are estimated at $2,400 per year. Machine B has an initial cost of $44,000, and its salvage value at the end of its six years of service life is estimated to be negligible. Its annual operating costs will be $11,500. Compare these two alternatives by the present-worth method at i = 13%.

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