A small chemical manufacture company needs to replace an old high-shear mixer. Two different models have been proposed. . Model A costs $250,000 for purchasing and installation. The model has service...

Extracted text: A small chemical manufacture company needs to replace an old high-shear mixer. Two different models have been proposed. . Model A costs $250,000 for purchasing and installation. The model has service life of 6 years and at the end of the sixth year has estimated salvage value of $50,000. The model in the first year has an operational and maintenance (O&M) cost of $24,000 and the cost increases each year by 5% over the previous year's O&M cost. • Model B costs $175,000 for purchasing and installation. The model has service life of 3 years and at the end of the third year has estimated salvage value of $30,000. The model in the first year has an operational and maintenance (O&M) cost of $11,000 and the cost increases each year by 7% over the previouS year's O&M cost. It the company has MARR of 10%, select the correct statement. O Select Model A because it has annual equivalent cost of $77,764 which is less than Model B O Select Model B because it has annual equivalent cost of $73,044 which is less than model A O Select Model A because by selecting Model B the company will have increase of incurred annual equivalent cost of $4,102 O Select Model B because by selecting Model A the company will have increase of incurred annual equivalent cost of S4,102