Consider a factory that must have an air cleaner that is mandated by law. There are two choices:

The Cadillac cleaner costs $3,500 today, has annual operating costs of $120, and lasts 12 years.

The Cheapskate cleaner costs $1,000 today, has annual operating costs of $480, and lasts 6 years.

Assuming a 15% discount rate and that factory will continue to operate for at least 12 more years, what is the EAC for each of the air cleaner? Which one should we choose?