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A janitorial services firm is considering two brands of industrial vacuum cleaners to equip their staff. Option A will cost $1500, will require servicing of

A janitorial services firm is considering two brands of industrial vacuum cleaners to equip their staff. Option A will cost $1500, will require servicing of $200 per year, and last five years. Option B will cost $1000, require servicing of $100 per year, and last three years. If the cost of capital is 8%, which is the better option, given that the firm has an ongoing requirement for vacuum cleaners? Why?

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