It is priced at only $1,500. Assuming your opportunity cost of funds is 6 percent, which refrigerator should you purchase?

You are in the market for a new refrigerator for your company’s lounge, and you have narrowed the search down to two models. The energy-efficient model sells for $1,700 and will save you $45 in electricity costs at the end of each of the next five years. The standard model has features similar to the energy-efficient model but provides no future saving in electricity costs. It is priced at only $1,500. Assuming your opportunity cost of funds is 6 percent, which refrigerator should you purchase?

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