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Use Annual Cost Analysis to determine whether Alternative A or B should be chosen. The...

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Accounting

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Use Annual Cost Analysis to determine whether Alternative A or B should be chosen. The analysis period is 5 years. Assume an interest rate of 6% per year, compounded annually Alternative A Alternative B 6750 Initial Cost 4000 Annual Benefit 250 580 180 535 Salvage Value Useful Life (yrs) 5 5 Alternative A should be chosen, because its initial cost is lower than Alternative B's O Alternative B should be chosen, because its annual benefit is higher than Alternative A's Alternative A should be chosen, because its equivalent annual cost is $259.87 lower than Alternative B's Alternative B should be chosen, because its equivalent annual cost is $259.87 higher than Alternative A's

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