The firm is considering 2 machines, Machine A with initial investment of $10,000 and annual maintenance cost $1000. The life of Machine A is 4 years. Machine B with initial investment of $20000 and annual maintenance cost of $800. The life of the machine. He is 6 years. If the required rate of return is 10%, calculate equivalent annual cost EAC of each machine and which machine must choose.

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IF % OF STANDARD LOSS IS NOT EQUAL TO % OF ACTUAL LOSS THEN __________ VARIANCE EXIST.

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