Suppose you are a health fitness consultant. Your clients come to you for advice ranging from diet and nutrition to exercise. One of your clients is Dustin Winthrop. He is relatively healthy but has an underlying health condition that puts him in the vulnerable category for COVID-19. He is worried about going back to the gym to workout once Monterey County lets gyms reopen. He wants you to help him evaluate two options:

Option A: Go back to the gym. He is currently paying $130 per month for a gym membership. He assumes that this price will likely remain the same for the next 8 years. If he goes back to the gym, he will make sure to observe social distancing, wear gloves and a face mask, and make sure each equipment that he uses is wiped down and sanitized.

Option B: Purchase Tonal. A home gym that costs $2,995. He also has to purchase equipment worth $495 and pay for installation (assume this is $350) and taxes (assume the sales tax is 9.5% and will be applied to the total cost). He also has to pay a $49 per month membership fee. He assumes this monthly membership fee will likely remain the same for the next 8 years.

Your job is to make a recommendation about which option will be more cost effective.

Use NPV to find out which option (A or B) is more cost effective if Dustin keeps working out for the next six years and the discount rate is 2.25%.