10. 10 points) Springfield Ironworks (SI) recently had their furnace break down and they need to quickly purchase a new one to minimize the disruption in their production. They can either choose a high quality furnace (H) that costs $140,000 $5,000 of annual maintenance costs for the 7-year life of the furnace, or a low quality furnace (L) that costs $75,000 $9,500 in annual maintenance costs for the 4-year life of the furnace. Which furnace should SI choose? What is the annualized cost of their choice? Assume a discount rate of 4.0%, and ignore all taxes.

L, $30,162

H, $170,010

H, $28,325

L, $109,484