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You are trying to pick the least expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $18500

You are trying to pick the least expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $18500 to purchase and which will have OCF of -$2100 annually throughout the vehicle's expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $28000 to purchase and which will have OCF of -$1100 annually throughout that vehicle's expected 4-year life. Both cars will be worthless at the wnd of their life. You intend to replace whichever type of car you choose with the same thing when its life runs out, again and again into our forseeable future. Ifvthe business has a cost of capital of 12 percent, calculate the EAC.

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