Mike Mulligan, CEO of Mulligan Excavation Inc, needs to replace Mary Anne, his old steam-driven shovel. Mike is looking at three used Caterpillar hydraulic excavators. Each alternative is a different model and each is a different age, and so each has a different expected working life and productive capability. Mike has produced estimates (in the table below) of the purchase price of each excavator and the associated after-tax cash flows that he expects to earn. Mike's cost of capital is 9%.

Calculate the equivalent annual annuity for Model A.

Based on your analysis Mick should choose:

Time Model A Model B Model C

1 -143 -109 -119

2 51 97 46

3 70 41 44

4 35 63

5 34