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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 $17,000

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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 $17,000 to purchase and which will have OCF of - $2,500 annually throughout the vehicle's expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $22,000 to purchase and which will have OCF of -$1,000 annually throughout that vehicles expected four-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, what are the Net Present Value and Equivalent Annual Cost of the least expensive car (as measured on an annualized basis)? NPV EAC NPV -$25,037 EAC - $ 8,243 O NPV -$23,005 EAC $ 9,578 NPV -$24,593 EAC -$ 8,097 O NPV -$24,402 EAC $10,160

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