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5. (20 points) Office Automation, Inc., is obliged to choose between two copiers, XX40 or RH45 Xx40 costs less than RH45, but its economic life

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5. (20 points) Office Automation, Inc., is obliged to choose between two copiers, XX40 or RH45 Xx40 costs less than RH45, but its economic life is shorter. The costs and maintenance expenses of these two copiers are given as follows. These cash flows are expressed in real terms. Copier XX40 RH45 Year0 2 3 4 5 $700 S100 $100 $100 900 10 10 10 110 110 The inflation rate is 5% and the nominal discount rate is 14%. Assume that revenues are the same regardless of the copier, and that whichever copier the company chooses, it will buy the model forever. Which copier should the company choose? Ignore taxes and depreciation

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