Cool for School Corporation is a manufacturer of smart boards and plans to purchase new equipment for its manufacturing process. After contacting the appropriate vendors, the purchasing department received differing terms and options from each vendor. The Engineering Department has determined that each vendor’s equipment is substantially identical to the others, and each has a useful life of 10 years. In addition, the estimated required year-end maintenance costs will be $2,000 per year for the first 3 years, $3,000 per year for the next 4 years, and $4,000 per year for the last 3 years. Following is each vendor’s competitive bid:
Vendor A: $35,000 cash at time of delivery and 10 year-end payments of $10,000 each. Vendor A offers a maintenance plan, under which it will take care of all required year-end maintenance, for a one-time cost of $5,000.
Vendor B: $9,000 semi-annual payments for 10 years, with an initial down payment of $15,000. Vendor B will perform all year-end maintenance for the next 10 years at no extra charge.
Vendor C: Full cash price of $130,000.

Assume the following:

● Both Vendor A and Vendor B will be able to perform the required year-end maintenance.
● Cool for School’s cost of funds is 10%.

a. From which vendor should the equipment be purchased? Support your answer with a quantitative analysis.

b. List some tangible benefits or feasibility factors that Cool for School should include in the analysis.