Lowell Textiles is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 12 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $450,000, annual operating costs of $30,000, and a 3-year life. Machine B costs $301,000, has annual operating costs of $55,000, and a 2-year life. The firm currently pays no taxes. Which machine should be purchased and why?

A. Machine A; because it will save the company about $19,215 a year

B. Machine A; because it will save the company about $15,744 a year

C. Machine B; because it will save the company about $17,310 a year

D. Machine B; because it will save the company about $16,315 a year

E. Machine B; because it will save the company about $15,298 a year