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You are considering the purchase of new equipment for your organization and you have narrowed down the possibilities to two models that perform...

You are considering the purchase of new equipment for your organization and you have narrowed down the possibilities to two models that perform equally well. However, the method of paying for the two models is different. Model A requires $5,000 per year payment for the next five years. Model B requires the following payment schedule. Which model should you buy if opportunity cost is 8%?

Year Payment (Model B)
1 $7,000
2 $6,000
3 $5,000
4 $4,000
5 $3,000

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