A telecommunications firm is considering a product expansion of a popular cell phone. Two alternatives for the cell phone expansion are summarized below. The company uses a MARR of 8% per year for decisions of this type, and repeatability may be assumed. Which alternative should be recommended and why?

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Expansion A Expansion B Capital investment Annual revenue $1,250,000 $580,000 $360,000 $150,000 8 years $1,000,000 $760,000 $500,000 Annual expenses Salvage value Useful life $100,000 6 years