The Illinois Central Railroad is planning to purchase a new locomotive for hauling coal from new fields in Eastern Oklahoma to coal-fired power plants in Illinois. An RX500 with AC traction drive from Republic Locomotive will cost $2.4 million and have a useful life of 10 years. The RX500 will use 50,000 gallons of diesel fuel each year and will require $20,000 of maintenance each year. The railroad is also considering Lion-Chiefs model ES44 locomotive with DC traction. The ES44 would cost $1.2 million and have a useful life of 12 years. Although the ES44 is less expensive, the ES$$ would use 150,000 gallons of diesel fuel each year to transport the same tonnage as Republics locomotive and would require $40,000 of yearly maintenance. The cost of diesel fuel is expected to be $2.00 per gallon for the foreseeable future. The Internal Revenue Service permits locomotives to be depreciated to a zero salvage value over a 6-year life. Assuming the Illinois Central Railroad has a tax rate of 30 percent and a required return of 10 percent, determine whether the railroad should purchase the RX500 or the ES44.