A Garage Is Comparing the Cost of Buying Two Different

Multiple Choice

A garage is comparing the cost of buying two different car hoists.Hoist A will cost $20,000,will require servicing of $1000 every two years,and last ten years.Hoist B will cost $15,000,require servicing of $800 per year,and last eight years.If the cost of capital is 7%,which is the better option,given that the firm has an ongoing requirement for a hoist?

A) Hoist A,since it has a greater present value (PV) .
B) Hoist B,since it has a greater present value (PV) .
C) Hoist A,since it has a greater equivalent annual annuity.
D) Hoist B,since it has a greater equivalent annual annuity.
E) Hoist A,since it has a lower equivalent annual annuity.