Whispering Pines Golf Club is trying to decide the best course of action for its fleet of new golf carts. Whispering Pines can buy premium tires at a cost of $10,000 per cart. These tires last four years and then must be replaced. It is expected the prices for the tires will not change. A cart is expected to last sixteen years, at which time it is replaced. The second option is to buy regular tires at a cost of $5,100 and replace them every two years. Use 3% as the interest rate.

Required:
Determine the better option by preparing a present value calculation for the cost of the tires for the sixteen-year economic life of the golf cart.