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Suppose Hu's Software Design, Inc. from problem 6 has a choice between two computer systems. The first one will cost $80,000 and will have an

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Suppose Hu's Software Design, Inc. from problem 6 has a choice between two computer systems. The first one will cost $80,000 and will have an economic life of 4 years. Annual maintenance costs would be $10,000. The other alternative would cost $135,000 and would have an economic life of 6 years. The annual maintenance would cost$13,000. Both alternatives would be fully depreciated using the straight-line method. Neither computer system will have a salvage value. The cost savings generated on an annual basis are assumed to be the same and the company expects to generate sufficient profits to realize the depreciation tax shield. The discount rate is 11% and the corporate tax rate is 35%. Which computer should be chosen

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