Suppose your bottling plant is in need of a new bottle capper. You are consideri

Suppose your bottling plant is in need of a new bottle capper. You are considering two different capping machines that will perform equally well but have different expected lives. The more expensive one costs $30000 to buy requires the payment of $3000 per year for maintenance and operation expenses and will last for 5 years. The cheaper model costs only $22000 requires operating and maintenance costs of $4000 per year and lasts for only 3 years. Regardless of which machine you select you intend to replace it at the end of its life with an identical machine with identical costs and operating performance characteristics. Because there is not a market for used cappers there will be no salvage value associated with either machine. Lets also assume that the discount rate on both of these machines is 8 percent.