Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Its discount rate is $10\mathrm{.}6\%10\mathrm{.}6\%.$ The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown$$ below, which should it$$ choose? $($Note: dollar amounts are in$$ thousands.$)$

Model

Year $0$

Year $1$

Year $2$

Year $3$

Year $4$

Year $5$

Year $6$

Year $7$

Old Reliable

negative $ $198$$$198$

negative $ $3\mathrm{.}9$$$3\mathrm{.}9$

negative $ $3\mathrm{.}9$$$3\mathrm{.}9$

negative $ $3\mathrm{.}9$$$3\mathrm{.}9$

negative $ $3\mathrm{.}9$$$3\mathrm{.}9$

negative $ $3\mathrm{.}9$$$3\mathrm{.}9$

negative $ $3\mathrm{.}9$$$3\mathrm{.}9$

negative $ $3\mathrm{.}9$$$3\mathrm{.}9$

Short and Sweet

negative $ $98$$$98$

negative $ $1\mathrm{.}8$$$1\mathrm{.}8$

negative $ $1\mathrm{.}8$$$1\mathrm{.}8$

negative $ $1\mathrm{.}8$$$1\mathrm{.}8$

negative $ $1\mathrm{.}8$$$1\mathrm{.}8$

Question content area bottom

Part $1$

Based on the costs of each$$ model, which should it$$ choose? $($Select the best choice$$ below.$)$

A$.$

Gateway Tours should choose Short and Sweet because the NPV of its costs is smaller.

B$.$

Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller.

C$.$

Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller.

D$.$

Gateway Tours should choose Old Reliable because it lasts longer.