You are in the process of getting your pastry shop up and running and are considering buying a commercial high-en

You are in the process of getting your pastry shop up and running and are considering buying a commercial high-end oven that bakes your pastries to perfection. You have the following options:

Assume that the above cash flows are nominal. The initial cost is payable now and the annual maintenance cost is payable at the end of each year over the life of the equipment. The great thing about these brands is, that they will take the ovens back at the end of the life and pay you of its initial cost, as shown in the above table

The nominal effective annual rate is 5.6% p.a. Ignore tax.

A. Calculate the NPV for each option. Express your answer to the nearest cent.

B. Calculate the EAC for each option. Express your answer to the nearest cent.

C. Which brand should you choose? Why?