You have two TVs that you can purchase. The first TV cost $999 and needs $25 of repairs per year. It will last for five years and then you will need to replace it with a new one. The second TV costs $1,450 and needs $12 of repairs per year. It will last for seven years and then you will need a new one. In present value terms, how much cheaper per year is the cheaper TV if your cost of capital is 6%?

Multiple Choice

• 8.56

• 7.14

• 10.78

• 7.45

• 9.59