Consider the following data on two pieces of equipment:

a. Suppose that the capital investment on Equipment 1 is known with certainty. By how much would the estimate of capital investment on Equipment 2 have to vary so that the initial decision based on these data would be reversed? The annual MARR is 15% per year.
b. Determine the life of Equipment 1 for which the AWs are equal.

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Equipment 1 Equipment 2 Capital investment Annual revenues Annual expenses Estimated market value Useful life $50,000 $15,000 $800 $2,000 10 years $75,000 $20,000 $1,200 $2,500 12 years