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A local franchise of Merry Maids, a cleaning service company, is looking to buy new cars. The franchise owner is considering two models: 2020 Ford

A local franchise of Merry Maids, a cleaning service company, is looking to buy new cars. The franchise owner is considering two models: 2020 Ford Focus Electric for $30,000 or 2020 Ford Focus Gas for $22,000. Both models will be used and depreciated over 10 years and will have no value thereafter. The electric model is projected to cost about $110/month in electricity, while the gas model will cost about $200 in gas expenses per month. The firms weighted average cost of capital is 8% APR. If the cost of electricity and gas are not expected to change over time, and all other car ownership expenses are expected to be the same for both models, which model should the franchise purchase and why? You must provide quantitative evidence to support your recommendation.

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