Delightful Climate Forecasters (DCF) are planning to contract for a suite of new office equipment (printers, computers, etc.). DCF is considering two proposals that each involve substantial startup costs and annual maintenance costs. Proposal A costs more up front but is a 5-year arrangement. Project B costs less up front, but costs more each year and will have to be renewed after 4 years. DCF is using a discount rate of 8%.

What is the Equivalent Annual Cost of Proposal A? What is the Equivalent Annual Cost of Proposal B?

Year	Proposal A	Proposal B
0	-$85,000	-$70,000
1	-$8,000	-$10,000
2	-$10,000	-$12,000
3	-$12,000	-$14,000
4	-$14,000	-$16,000
5	-$16,000