Which option choose when rapid inc replace air conditioning

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Problem 1: Rapid, inc must replace the air conditioning unit in its office it is evaluating two mutually exclusive options with the expectation that the units will continue to be replaced at the end of their useful lives, option 1 costs 7800 and has a subsequent annual cost of 500 it last 7years. option 2 cost 9200 last 10years and has an equivalent annual cost of $2,097.26. project of this risk required a rate of return of 10%/ both of the initial cost and subsequent cost are negative. which option do you choose and why?

Reference no: EM132956979

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