The Central Railroad is planning to purchase a new locomotive for hauling coal from recently developed surface deposits in Northeastern Oklahoma to the coal-fired power plants in Northern California. An RX500 with AC traction drive from Republic Locomotive will cost $2.8 million and have a useful life of 10 years. The RX500 will use 80,000 gallons of diesel fuel each year and will require $25,000 of maintenance each year. The railroad is also considering Lion-Chief's model ES44 locomotive with DC traction. The ES44 would cost $2.1 million and have a useful life of 12 years. Although the ES44 is less expensive, the ES44 would use 135,000 gallons of diesel fuel each year to transport the same tonnage as Republic's locomotive and would require $40,000 of yearly maintenance. The cost of diesel fuel is expected to be $2.25 per gallon for the foreseeable future. The Internal Revenue Service permits locomotives to be depreciated to a zero salvage value over a 7-year life. The Railroad has a tax rate of 20 percent and a required return of 10 percent. Assuming that the replacement cost and operating expenses of the two locomotives are expected to remains constant, determine whether the railroad should purchase the RX500 or the ES44.