Holly Farms is considering two environmental chambers to accomplish detailed laboratory confirmations of online bacteria tests in chicken meat for the presence of E. coli 0157:H7 and Listeria monocytogenes. There is some uncertainty about how long the D103 chamber will be useful. A realistic estimate is 3 years, but pessimistic and optimistic estimates of 2 years and 6 years, respectively, are also possible. The estimated salvage value will remain the same. Using an interest rate of 10% per year, determine if any of the D103 estimates would result in a lower cost than that of the 490G chamber for a 6-year planningperiod.

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Chamber D103 Chamber 490G Installed cost, S AOC, $ per year Salvage value at 10% off, $ Life, years -400,000 -4,000 40,000 2, 3, or 6 -250,000 -3,000 25,000