The expected annual maintenance expense for a new piece of equipment is $10,000. This is Alternative A. Alternatively, it is possible to perform the maintenance every fifth year at a cost of $50,000 (Alternative B). In either case, maintenance will be performed in the fifth year so that the equipment can be sold for $100,000 at that time. If the MARR is 15% per year (before income taxes), which alternative should be recommended in
each of these situations?
a. Before income taxes are considered.
b. After income taxes are considered when t = 40%.
c. Is there a different selection before and after income taxes are considered?