# solution

You are starting a family pizza parlor and need to buy a motorcycle for delivery orders. You have two models in mind. Model A costs \$8,300 and is expected to run for 7 years; Model B is more expensive, with a price of \$15,100, and has an expected life of 9 years. The annual maintenance costs are \$860 for Model A and \$720 for Model B. Assume that the opportunity cost of capital is Calculate equivalent annual costs (EAC) of each models. (Do not round the discount factor. Round intermediate calculations and final answers to 2 decimal places, e.g. 15.25.)

EAC of Model A is \$
EAC of Model B is \$ Calculate equivalent annual costs (EAC) of each models. (Do not round the discount factor. Round intermediate calculations and final answers to 2 decimal places, e.g. 15.25.)

 EAC of Model A is \$ EAC of Model B is \$

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