414.3
3. You are trying to decide between two computer
systems for your firm, both of which perform the same function.
The first one lasts 4 years and the present value of all of its
costs is $50,000. The second one lasts for 3 years and the
present value of all of its costs is $40,000. You plan to commit
to one of the systems for the next 12 years (thus you will have
to replace which ever system you choose with an identical one at
the end of its life). If the correct discount rate for this
project is 6%, which should you choose? (2)