You are considering the purchase of new machine for your company and you have narrowed down the possibilities to two models which perform equally well. However, the method of paying for the two models is different. Model YY requires RM5,000.00 per year payment for the next five years. Model ZZ requires the following payment schedule.

Year Model ZZ (Payment in RM)

1 7,000.00

2 6,000.00

3 5,000.00

4 4,000.00

5 3,000.00

Which model should you buy if your opportunity cost is 8 percent?