Choose between alternatives A and B below if the after-tax MARR is 8% per year, MACRS depreciation is used, and Te = 40%. The GI–OE estimate is made for only 3 years; it is zero when each asset is sold in year4.

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Alternative Alternative First cost, S Actual salvage value, S Gross income expenses, S 3,500 Recovery period, years 8,000 13,000 2,000 5,000