The following practice problem has been generated for you:
Given Item A:
Investment cost of $58,672.00
a lifetime of 6 periods
Maintenance cost = $10,375.00
Item B has an investment cost of $95,581.00, a lifetime of 9 periods, with a maintenance cost per period of $6,408.00
Calculate the Equivalent Annual Cost (EAC) for each Item using a cost of capital of 8% and determine a conclusion