Cooper Technologies Ltdis a company that provides geospatial services for national governments, states, provinces, counties, municipalities, and commercial organisations around the world. The companys geospatial services encompass the acquisition, analysis, integration, visualisation and management of geospatial data.To boost their competitive advantage against peer firms in the area of geospatial data acquisition, Cooper Technologies Ltd has decided to launch a new Earth observation satellite. After carefully considering sale proposals from a number of well-known aerospace companies, Cooper Technologies Ltd has narrowed their choice to two next-generation imaging satellites: RD-6 manufactured by Davis Group Ltd and MK-8 by Koshiba Aerospace Ltd. Both satellites are regarded as suitable to complete the required job. As the financial comptroller of Cooper Technologies Ltd, you have been requested by the management board to advise which one of the two satellites the company should purchase.

The cost of a single RD-6 satellite is $350 million. A MK-8 imaging satellite carries a price tag of $300 million. Another significant factor with satellites is the cost of the launch. In particular, launching a single RD-6 satellite into space is expected to cost the company $100 million. Due to its heavier weight, launching a MK-8 satellite warrants a heavy-lift launch vehicle instead of a medium-lift launch vehicle used in the case of a RD-6 satellite launch. As a result, the cost of a MK-8 satellite launch is estimated to be $185 million. Both satellites are to be depreciated straight line down to a book value of zero over their entire useful life. Further details of each satellites cash flows are tabulated below:

	RD-6 satellite	MK-8 satellite
Annual revenue (to be received at the end of the year)	$105 million	$100 million
Annual operating cost (to be paid at the end of the year)	$25 million	$21 million
Satellite life	15 years	20 years

In addition to the cash flow information, you have also been provided with the following details:

• The corporate tax rate is 30%;
• Tax is paid on profits at the end of the year in which it is earned; and,

The required rate of return for both investment opportunities is 9.8% p.a

Based on the equivalent annual cash flow and the constant chain of replacement in perpetuity, which satellite, if any, do you recommend Cooper Technologies Ltd to proceed with ?