A school must purchase new equipment for its chemistry lab….
A school must purchase new equipment for its chemistry lab. Two providers submitted the following estimates. The salvage values are not expected to change. The school evaluates laboratory equipment purchases over a 4-year study period using a present worth analysis. The annual effective interest rate is 8%. Provider A Provider B First cost, $ 19,000 20,900 Annual maintenance & operating costs, $ per year 3,400 1,700 Salvage value 1,900 2,090 Life, years 5 8 What is the present worth of the cash flow for Provider A that should be used in the analysis? $ (round to nearest dollar) The net present worth of the cash flows for Provider B is −$24,990. Based on a present worth analysis, which provider should the school select, A or B?