Question: A professional kitchen is attempting to choose between gas and electricity for its main heat source. Once a choice is made, the kitchen intends to

A professional kitchen is attempting to choose between gas and electricity for its main heat source. Once a choice is made, the kitchen intends to keep to that source indefinitely. Each gas oven has a net present value (NPV) of $80,990 over its useful life of 7 years and each electric oven has an NPV of $84,240 over its useful life of 8 years. The cost of capital is 3%.

Identify which should the kitchen choose and explain why.

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