A Local Hospital is evaluating new lab. Equipment. The interest rate is $8\%$ and in each case the equipment$$s useful life is $10$ years. Use the NPV analysis to select the best equipment.

Company A B C

First Cost $$20,000$ $$30,000$ $$25,000$

O&M Cost $260014001900$

Benefit$/$Yr$.5,0007,5006,500$

Salvage Val. $6,0009,0007,500$

$($i$)$ Select the best alternative based on NPV analysis.

$($ii$)$ Do a break$-$ even study based on $$First Cost$$ with the next best alternative. For example, if B is the best alternative and C is the second best, then lowering the $$First Cost$$ of alternative C will make it more competitive. Find out at what value of the $$First Cost$$ C breaks even with B$.$ At break even the NPVs are equal.