Zoysia University must purchase mowers for its landscape department. The university can buy four EVF mowers...

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Zoysia University must purchase mowers for its landscapedepartment. The university can buy four EVF mowers that cost $7,800each and have annual, year-end maintenance costs of $1,635 permower. The EVF mowers will be replaced at the end of Year 4 andhave no value at that time. Alternatively, Zoysia can buy six AEHmowers to accomplish the same work. The AEH mowers will be replacedafter seven years. They each cost $6,800 and have annual, year-endmaintenance costs of $1,625 per mower. Each AEH mower will have aresale value of $900 at the end of seven years. The university’sopportunity cost of funds for this type of investment is 7 percent.Because the university is a nonprofit institution, it does not paytaxes. It is anticipated that whichever manufacturer is chosen nowwill be the supplier of future mowers. What is the EAC ofeach type of mower?

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Zoysia University must purchase mowers for its landscapedepartment. The university can buy four EVF mowers that cost $7,800each and have annual, year-end maintenance costs of $1,635 permower. The EVF mowers will be replaced at the end of Year 4 andhave no value at that time. Alternatively, Zoysia can buy six AEHmowers to accomplish the same work. The AEH mowers will be replacedafter seven years. They each cost $6,800 and have annual, year-endmaintenance costs of $1,625 per mower. Each AEH mower will have aresale value of $900 at the end of seven years. The university’sopportunity cost of funds for this type of investment is 7 percent.Because the university is a nonprofit institution, it does not paytaxes. It is anticipated that whichever manufacturer is chosen nowwill be the supplier of future mowers. What is the EAC ofeach type of mower?