Question: An existing machine must be replaced. Two new models are under consideration. Both cost $15,000. Model X will generate savings of $10,000 per year. Has

An existing machine must be replaced. Two new models are under consideration. Both cost $15,000.
Model X will generate savings of $10,000 per year. Has a life of 2 years.
Model Y will generate savings of $18,000 per year and has a life of 1 year.
The machines will be needed for two years and model Y can be repeated at the end of one year.
The cost of money is 8.25%
Which model should be preferred?

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