Huntsman Associates is considering upgrading its escalator equipment. Machines from vendors A and B have the...

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Huntsman Associates is considering upgrading its escalator equipment. Machines from vendors A and B have the same output, but have different useful lives and operating costs. A's lasts four years while B's lasts three years. The discount rate for the project is 10%, and the performance for each type of equipment is the same. Costs are given below: A B t= 0 50 30 12 12 20 1 2 3 4 5 5 15 15 Ignoring taxes and depreciation, and assuming that Huntsman plans to operate the machines into the distant future, which vendor should Huntsman Associates choose? Huntsman Associates is considering upgrading its escalator equipment. Machines from vendors A and B have the same output, but have different useful lives and operating costs. A's lasts four years while B's lasts three years. The discount rate for the project is 10%, and the performance for each type of equipment is the same. Costs are given below: A B t= 0 50 30 12 12 20 1 2 3 4 5 5 15 15 Ignoring taxes and depreciation, and assuming that Huntsman plans to operate the machines into the distant future, which vendor should Huntsman Associates choose?

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