Question: You can continue to use your less efficient machine at a cost of $ 9 , 2 0 0 annually. Alternatively, you can purchase a

You can continue to use your less efficient machine at a cost of $9,200 annually. Alternatively, you can purchase a more efficient machine for $13,200 plus $6,200 annual maintenance. If the new machine lasts 5 years and the cost of capital is 15%, you should:
Multiple Choice
buy the new machine and save $660 in equivalent annual costs.
buy the new machine and save $746 in equivalent annual costs.
keep the old machine and save $746 in equivalent annual costs.
keep the old machine and save $938 in equivalent annual costs.

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