Huntsman Associates is considering upgrading its escalator equipment. Machines

from vendors A and B have the same output, but have different useful lives and

operating costs. A's lasts four years while B's lasts three years. The discount rate

for the project is 10%, and the performance for each type of equipment is the

same. Costs are given below:

t= 0

1

2

3

4

A

50

5

5

15 15

B

30

12 12 20

Ignoring taxes and depreciation, and assuming that Huntsman plans to operate the machines into the distant future, which vendor should Huntsman Associates choose?

1