Use the following data to answer Questions 15 through 18: Cotner Clothes Inc. is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Model X has a cost of $190,000, a 3-year life, and after-tax cash flows of $87,000 per year. Model Y has a cost of $360,000, a 6-year life, and after-tax cash flows of $98,300 per year. Assume that Cotners WACC is 14 percent.

15. The NPV of Model X is: *

A. $11,982

B. $12,505

C. $17,200

D. $30,000

E. None of the above

16. The NPV of Model Y is: *

A. $25,326

B. $22,256

C. $30,252

D. 15,696

E. None of the above

17. The Equivalent Annual Annuity (EAA) for Model X is: *

A. $6,000

B. $5,161

C. $6,252

D. $4,563

E. None of the above

18. The Equivalent Annual Annuity (EAA) for Model Y is: *

A. $7,250

B. $6,341

C. $5,723

D. $7,250

E. None of the above