26. Zuker Distributors handles the warehousing of perishable foods and is considering replacing one of its primary cold storage units. One supplier has offered a unit for

$250,000 with an expected life of 10 years. The unit is projected to reduce electricity costs by $50,000 per year. However, it requires a $20,000 refurbishing every two years, beginning two years after purchase. Another supplier has offered a cold storage unit with similar capabilities for $300,000. It will produce the same savings in electricity costs, but requires refurbishing every five years at a cost of

$40,000. Zuker’s cost of capital is 8.5%. Use NPV to determine which cold storage unit Zuker should select.