Some equipment will be installed in a warehouse that a firm has leased for 7 years. There are two alternatives:
At any time after the equipment is installed, it has no salvage value. Assume that Alternatives A and B will be replaced at the end of their useful lives by identical equipment with the same costs and benefits. For a 7-year analysis period and a 10% interest rate, use an annual cash flow analysis to determine which alternative should be selected.