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6) [7 Points Total] Your business requires you to replace a piece of machinery. You have two options for replacing the machine: Option A and
6) [7 Points Total] Your business requires you to replace a piece of machinery. You have two options for replacing the machine: Option A and option B. Option A requires an upfront cost of 15, followed by maintenance costs of 8 at the end of each year for 4 years. Option B requires an upfront cost of 11, followed by maintenance costs of 7 at the end of each year for 2 years. The opportunity cost of capital is 6%. Using the equivalent annual cost method, determine which option is lower cost
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