The town of Millbridge has to make a decision on replacing its garbage truck. It has narrowed the choice down to two different models. Model A will initially cost $80,000 and then will cost $4,100 per year to operate for its 20-year life. Model B will initially cost $100,000 and then will cost $3,600 per year to operate for its 30-year life. Use the annualized cost approach to determine which is a better choice. Assume a discount rate of 6 percent per year.

Model A Model B INPUT DATA Initial Outflow PMT nper Rate PV of Operating Costs Acquisition Cost Net Present Cost Annualized Cost