To comply with Pima County Health Regulations, the University of Arizona must install hand sanitizing stations throughout campus.
The first quote from a supplier comes in at $600,000 today, and the supplier claims the University will save $70,000/year in water and soap, and that the hand sanitizing stations will last 10 years.
The second quote comes in at $300,000 today, and the supplier claims the University will save $50,000/year in water and soap, and that the hand sanitizing stations will last 5 years.
Assume a discount rate of 4%.
In the first two blanks below, calculate (1) the NPV of the first quote and (2) the EAC of the second quote. Round to the nearest dollar. In the final blank, report which supplier the University should select. (write either 1 or 2)