Mountain Pass Canning Company has determined that any one of five machines can be used in one phase of its canning operation. The costs of the machines are estimated below, and all machines have a 5-year life. If the minimum attractive rate of return is20% per year, determine the one machine that should be selected on the basis of a rate of return analysis.

Annual
Operating
Machine First Cost, $ Cost, $/year Salvage Value
1 -31,000 -18,000 5400
2 -28,000 -19,500 5300
3 -34,500 -17,000 1000
4 -48,000 -12,000 0
5 -41,000 -15,500 2200

A) Select Machine 1
B) Select Machine 2
C) Select Machine 3
D) Select Machine 4