Engineering consulting firm is working alongside engineers

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An engineering consulting firm is working alongside engineers from Ford Motor Company comparing two SUV models to launch for next year’s market. The smaller SUV model will have an initial cost of $22,000, an operating cost of $1,000 per year, and a salvage value of $12,000 after 3 years. The larger SUV model will have initial cost of $26,000, an operating cost of $600 per year, and a salvage value of $15,000 after 3 years. At an interest rate of 15% per year, which model should they launch if they want to save as much money as possible on their investment?

Reference no: EM131245490

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