Ascent Hospitality manages 100 hotels and needs to purchase new vacuums. They are choosing between a Bosch Tornado and a Hoover Hickey Maker. The Bosch has a cost of $2,200 and annual operating expenses of $200. The expected life is 6 years and the expected salvage value is zero. Depreciation is straight-line over the 6-year life.

The Hoover costs $1,450, has annual operating expenses of $275 and an expected operating life of 4 years with no salvage value. Depreciation is straight-line over its expected life. The firm's required rate of return is 9%. Which model should they choose?