A chain cafeteria business is in the process of forming a separate business unit that provides meals to facilities for the elderly, such as assisted care and long-term care centers. Since the meals are prepared in one central location and distributed by trucks throughout the city, the equipment that keeps food and drink cold and hot is very important. The general manager wishes to choose between two temperature retention units ((H) and (IC)) that are mobile and easy to sterilize after each use. Use the cost estimates below to select the more economic unit at a MARR of 8% per year by utilizing the Annual Equivalent Worth Analysis. (NO need to draw the cash flow diagrams, but if you need them you can draw them, they will be not graded.)

Initial Investment cost (pbr) Annual Cost (Pbr/year) Refurbishment Cost (pbr) (H) -15 000 -6000 0 (IC) -20 000 -9000 4 years (i.e. at year 4 and at year 8) 8000 12 -2000 every Salvage Value (Pbr) Useful Life (year) 3000 4