The old filter system of a water station incurs a fixed filter expense of $150 per month. They also have a variable filter expense that is based on the number of refilling services they acquire that is $4 per service. In a new filter system, the fixed filter expense will lessen by 45% and the variable filter expense remains the same. The new filter system will have a one time contract cost of $1800. They need to examine the two alternatives for a span of 1 year in which they forecast that the number of services they can attain for the next 12 months is 1560 customers. What should be the decision of the water station?

1. Purchase the new system since it is cheaper by $990.

2. Do not purchase the new system since it is cheaper by $990.

3. Cannot be determined.

4. Don not purchase the new system since it is cheaper by $1200