Tamarisk Inc., a manufacturer of steel school lockers, plans topurchase a new punch press for use in its manufacturing process.After contacting the appropriate vendors, the purchasing departmentreceived differing terms and options from each vendor. TheEngineering Department has determined that each vendor’s punchpress is substantially identical and each has a useful life of 20years. In addition, Engineering has estimated that requiredyear-end maintenance costs will be $1,100 per year for the first 5years, $2,100 per year for the next 10 years, and $3,100 per yearfor the last 5 years. Following is each vendor’s sales package.Vendor A: $60,060 cash at time of delivery and 10 year-end paymentsof $18,850 each. Vendor A offers all its customers the right topurchase at the time of sale a separate 20-year maintenance servicecontract, under which Vendor A will perform all year-endmaintenance at a one-time initial cost of $9,500. Vendor B: Fortysemiannual payments of $10,280 each, with the first installment dueupon delivery. Vendor B will perform all year-end maintenance forthe next 20 years at no extra charge. Vendor C: Full cash price of$159,600 will be due upon delivery. Assuming that both Vendors Aand B will be able to perform the required year-end maintenance,that Tamarisk’s cost of funds is 10%, and the machine will bepurchased on January 1, compute the following: