Consider the following two mutually exclusive investment projects:

Salvage values represent the net proceeds (after tax) from the disposal of assets if they are sold at the end of the year listed. Both projects will be available (and can be repeated) with the same costs and salvage values for an indefinite period.
(a) With an infinite planning horizon, which project is a better choice at MARR = 12%?
(b) With a 10-year planning horizon, which project is a better choice at MARR = 12%?

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B Salvage Value Salvage Cash Flow Cash Flow Value -$10,000 -$12,000 $6,000 $6,000 -$2,000 -$2,100 $4,000 $3,000 -$2,000 -$2,100 $1,000 $3,000 -$2,100 3 -$2,000 $2,000 -$2,000 $2,000 -$2,000 4+