The management of Brawn Engineering is considering three alternatives to satisfy an OSHA requirement for safety gates in the machine shop. Each gate will completely satisfy the requirement, so no combinations need to be considered. The first costs, operating costs, and salvage values over a 5-year planning horizon are shown below. Using a present worth analysis with a MARR of 20 percent/year, determine the preferred gate.

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End of Year Gate 1 Gate 2 Gate 3 0 -$15,000 -$19,000 -$24,000 1 -$6,500 -$5,600 $4,000 2 -$6,500 -$5,600 -$4,000 3 -$6,500 -$5,600 -$4,000 4 -$6,500 -$5,600 -$4,000 5 $6,500 $0-$5,600+ $2,000-$4,000+ $5,000