Cullumber Manufacturing, Inc., needs to purchase a new central air-conditioning system for a plant. There are two choices. The first system costs $83,000 and is expected to last 10 years, and the second system costs $86,000 and is expected to last 15 years. Assume that the opportunity cost of capital is 10 percent. (Round answers to 2 decimal places, e.g. 5,275.25.)
System 1 System 2
Equivalent annual cost $enter a dollar amount rounded to 2 decimal places $enter a dollar amount rounded to 2 decimal places
Which air-conditioning system should Cullumber purchase?
Cullumber should purchase the select a system second systemfirst system.