ZBB

Package 1 gives a cost of 216,750. However the initial cost of 45,000 will be capitalised and will not be repeated each year. That leaves 171,750 that will be repeated. Similarly, the annual cost of Package 2 will be 235,500 - 98,500 = 137,000. That gives a saving each year of 171,750 - 137,000 = 34,750.