ABC will be purchasing one of the two available models for its manufacturing equipment. Both equipment and the product being manufactured will have a life of 8 years. Details are as follows: Model X Model Y P420,000 60,000 30,000 30,000 Cost Salvage Value Annual operating cost Major repair cost, 6th year P 400,000 50,000 40,000 0 Required: If ABC requires has a cost of capital (discount rate) of 10%, compute the following: How much is the equivalent annual cost of Model X (4 points)? 4. 5. How much is the equivalent annual cost of Model Y (4 points)? 6. Which model should be chosen by ABC (2 points)?