Your firm's discount rate is 8 percent. You are considering the purchase of Truck A or Truck B. Truck A costs $120, has a useful life of 3 years, no salvage value and maintenance costs of $10 per year. Truck B costs $85, has a useful life of 2 years, no salvage value and maintenance costs of $15 per year. Which truck should you select and why?

ANSWER CHOICES:

a) Truck A because the EAC of -56.6 is less than Truck B's EAC of -59.9.

b) Truck A because the EAC of -56.6 is less than Truck B's EAC of -62.7.

c) Truck A because the NPV of 146 if larger than B's NPV of 112.

d) Truck B because the EAC of 62.7 is greater than Truck A's EAC of 56.6.

** PLEASE FULLY EXPLAIN SO I CAN UNDERSTAND HOW THE ANSWER WAS ACCOMPLISHED**