The TechEdge Corporation offers two forms of 4-year service contracts on its closed-loop water purification system used in the manufacture of semiconductor packages for microwave and highspeed digital devices. The Professional Plan has an initial fee of $52,000 with annual fees starting at $1000 in contract year 1 and increasing by $500 each year. Alternatively, the Executive Plan costs

$62,000 up front with annual fees starting at

$5000 in contract year 1 and decreasing by $500 each year. The initial charge is considered a setup cost for which there is no salvage value expected.

Evaluate the plans at a MARR of 9% per year.

Solve using

(a) factors, and

(b) a spreadsheet.

(c) How is the analysis performed using a financial calculator?