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You are trying to pick the least - expensive car for your new delivery service. You have two choices: the Kia Rio, which will cost

You are trying to pick the least-expensive car for your new delivery
service. You have two choices: the Kia Rio, which will cost $14,000 to purchase and
which will have OCF of -$1,200 annually throughout the vehicle's expected life of three
years as a delivery vehicle; and the Toyota Prius, which will cost $20,000 to purchase
and which will have OCF of -$650 annually throughout that vehicle's expected 4-year
life. Both cars will be worthless at the end of their life. If you intend to replace
whichever type of car you choose with the same thing when its life runs out, again and
again out into the foreseeable future, and if your business has a cost of capital of 12
percent, which one should you choose?

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