Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $1,980,000 and will last for 5 years. Variable costs are 39 percent of sales, and fixed costs are $153,000 per year. Machine B costs $4,320,000 and will last for 8 years. Variable costs for this machine are 29 percent of sales and fixed costs are $110,000 per year. The sales for each machine will be $8.64 million per year. The required return is 10 percent and the tax rate is 35 percent. Both machines will be depreciated on a straight-line basis.