You are considering a purchase and maintenance contract for some required plant

equipment from two vendors. Vendor Y charges $160,000 upfront and then $15,000 per

year for the three-year life of the contract. Vendor Z charges $115,000 upfront and then

$35,000 per year for the two-year life of the contract. Assume an 8% cost of capital.

For each vendor:

Draw the time lines for each Vendor.

Write down the variables you know

Compute the NPV to the closest dollar

Compute the EAA for each vendor to the closest dollar (round)

Which Vendor will you go with? Give a Sentence why.