Ch 7:1 A hotel operator is considering replacing an old piece of equipment with a new one. He has provided you with the following information concerning three alternative equipment models (Use either one of the two methods in the text) Model Model Initial equipment cost [S year life] Residual value Initial year installation costs Initial year training costs Annual maintenance cost Annual supplies cost Annual equipment energy costs Annual employee wage costs $12,000 11,000 11,500 1,100 200 325 400 350 350 12,000 1,200 200 300 300 400 350 900 250 350 250 300 350 12,000 Based solely on lowest estimated cost over the five-year period, which model would you recommend to be purchased? Which equipment model do you recommend: Calculations: Model Mode Model Unique Costs First Year