You are a financial analyst for a company that is developing a new resort in Hawaii and the firm is in the process of purchasing 10 golf carts to carry potential condominium buyers around the property. You are choosing between one made by Club Car and one made by Yamaha. The two carts are judged to be similar in utility, but the Club Car is made more durably and is expcted to have an effective working life of 5 years, compared to 4 for the Yamaha. Your firm's tax rate is 35% and the required rate of return on this investment is 8%. Either one would be depreciated over its useful life to a salvage value of zero. At the end of their effective life the carts will be donated to a local school system and so will have zero estimated salvage value. Which cart should the firm purchase?

The following information is available:

	Club Car	Yamaha
Purchase Price	$22,000	$19,000
Annual Maintenance Expense	$1,900	$2,100
Salvage Value at Life End	$0	$0