Tim Brailsford, investment manager of Oliver Pty Ltd, is contemplating the necessary replacement of an item of manufacturing plant. A recent investigation of plant available revealed two suitable models marketed under the names "Spayed" and "Shuvel". The relevant information is listed below. The existing plant, although currently depreciated to a book value of zero, has an estimated salvage value of $12,000 if it is sold now. Given a tax rate of 40% and an estimated after-tax required rate of return of 10% p.a., which model would you recommend? Assume a classical tax system. State all assumptions and show all workings. (Hint: NPV in perpetuity should be applied)