A family is considering having a new furnace installed. They have received quotations from two companies. They desire to earn 8% from their investment. One furnace is expected to cost $1,800 initially, having operating costs of $1,000 per year, and lasts 10 year. The second alternative is advertised as a “high efficiency” model and would cost $2,600 initially, have annual costs of $800 per year, and lasts 12 years. Determine the best alternative. Which of the four analysis methods should be used?