Fiber Glasses must choose between two kinds of facilities. Facility I costs \($2.1\) million and its economic life is seven years. The maintenance costs for facility I are \($60,000\) per year.

Facility II costs \($2.8\) million and it lasts 10 years. The annual maintenance costs for facility II are \($100,000\) per year. Both facilities are fully depreciated by the straight-line method. The facilities will have no values after their economic lives. The corporate tax rate is 34 percent. Revenues from the facilities are the same. The company is assumed to earn a sufficient amount of revenues to generate tax shields from depreciation. If the appropriate discount rate is 10 percent, which facility should Fiber Glasses choose?