You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $200 for the phone and then monthly charges of $60 for 24 months. Carrier B wants you to pay $100 for the phone and monthly charges of $70 for 12 months. Assume you will keep replacing the phone after your contract expires. Your cost of capital is 4%.

Based on cost alone, which carrier should you choose? Based on cost alone, you will choose

Carrier B

Carrier A

(Select from the drop-down menu.)