Two mutually exclusive alternatives are being considered for pollution control equipment. The economic data is given below:
A B
Initial cost $20,000 $38,000
Annual expenses $5,500 $5,000
Useful life 5 years 9 years
Salvage value at the end $1,000 $3,000
Of useful life
The study period is 9 years. If alternative A is selected, a portable system would be leased for the last 4 years at a cost of $10,000 per year including all expenses. If the MARR is 15% per year, which alternative should be selected?