Question $17$

$1$ pts

Jonathan Zittrain & Co$.$ is choosing between two models of equipment. The deluxe model's purchase price is $$250,000$ and incurs the annual maintenance cost for its useful life of $13$ years. The economy model has both a lower cost and useful life. The company's cost of capital is $7\%.$ What is the decision criteria for purchasing the deluxe model rather than the economy model? Select the best reason why.

Select the deluxe model if its net present value of $-$$$333,576\mathrm{.}51$ is greater than the economy model's.

Select the deluxe model if its net present value of $-$$$380,000\mathrm{.}00$ is greater than the economy model's.

Select the deluxe model if its equivalent annual annuity of $-$$$25,659\mathrm{.}73$ is greater than the economy model's.

Select the deluxe model because it lasts longer.

Select the deluxe model if its equivalent annual annuity of $-$$$39,912\mathrm{.}71$ is greater than the economy model's.