Celisus, Inc., must replace the air conditioning unit in its office. It is evaluating two mutually exclusive options, with the expectation that units will continue to be replaced at the end of their useful lives. Option 1 costs $7,800 and has subsequent annual costs of $500. It lasts 7 years. Option 2 costs $9,200, lasts 10 years, and has an equivalent annual cost (EAC) of $2,097.26. Projects of this risk have a required return, or cost of capital, of 10%. Which option do you choose and why? Justify your decision with a calculation. Clearly label your answer and calculate inputs.