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1. Utopia Tours is choosing between two bus models. One is more expensive to purchase...

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Finance

1. Utopia Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Its discount rate is 10.9%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown below, which should it choose? (Note: dollar amounts are in thousands.)

Model Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Old Reliable $202 $3.9 $3.9 $3.9 $3.9 $3.9 $3.9 $3.9 Short and Sweet $100 $2.1 $2.1 $2.1 $2.1 Based on the costs of each model, which should it choose?

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