Answer please

Question 4. (20 points) A logistics company needs to select a truck model that will be used indenitely. The following table provides estimations for two alternatives under consideration: I Model A Model B Initial cost $29,000 $35,000 Useful life 9 years 15 years Fuel consumption $0.70/km $0.66/km Salvage value $14,000 $15,000 Usage 10,000 km/year The company's MARE is 15% per year. For either model, the repeatability assumption is satised (i.e., each model can be replaced by an identical one at the end of its useful life, initiating the same cycle of cash ows). a) (10 points) Calculate the capital recovery cost for each model. b) (5 points) The company wants to decide on which model to choose. Which method is preferable for the analysis? Explain why. c) ( 5 points) Which model should the company choose? Explain why