Apex must use a chemical finishing process for a product subject to a 6-year manufacturing contract. Neither option 1 nor option 2 may be repeated once their useful life is over. However the company H&H Chemicals will offer option 3 at the same time throughout the contract length.

Option 1: Treatment device A, which costs $100,000, incurs a fee annual operating and labor costs of $60,000; its useful life is estimated at 4 years and its salvage value, at $10,000.

Option 2: Treatment device B, which costs $150,000, incurs a fee operating and labor costs of $50,000; its useful life is estimated at 6 years and its salvage value, at $30,000.

Option 3: Use subcontracting at a cost of $100,000 per year.

Based on the present value equivalent (NPV) criterion, which option would you recommend, if i = 12%. Show your calculations in your working document.