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Your company needs a new computer server, and you are trying to pick the least-expensive one for your company. You have two choices: server A,

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Your company needs a new computer server, and you are trying to pick the least-expensive one for your company. You have two choices: server A, which will cost $100,000 to purchase and which will have OCF of ($7,000) annually throughout the server's expected life of three years, and server B, which will cost $125,000 to purchase and which will have OCF of ($2,600) annually throughout that server's four-year life. Both servers will be worthless at the end of their life. If you intend to replace whichever type of server 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 15 percent, which one should you choose? O A. Server A O B. Both Server A and B O C. Neither Server A nor B O D. Server B

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