Digital Copiers are opening up a new store and are in need of new copying machine. They are evaluting two models and need to choose one. Xerox WorkCentre copier cost $350 to purchase, result in electricity bills of $160 per year, and last for 5 years. Epson EcoTank copier cost $550, result in electricity bills of $120 per year, and last for 8 years. The discount rate is 21%.

a. What is the equivalent annual cost of the Epson EcoTank model? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. Which model is more cost-effective?

• Xerox WorkCenter

• Epson EcoTank