Answer part (a) only

The following pair of assets differ only in the MARR. The problem asks you to determine the effect of this difference on the economic life and to explain the result. All assets decline in value by 20 percento year. Installation costs are zero for all assets. Further data concerning the four pairs of assets are given in the table that follows. Asset A B First Cost $125,000 $125.000 Initial Operating Cost $30,000 $30,000 Rate of Operating Cost Increase 13.5%/year 13.5%/year MARR 5% 25% a. Determine the economic lives for assets A and B. b. Create a diagram showing the EAC(capital), the EAC(operating), and the EAC(total) for assets A and B. c. Explain the difference in economic life between A and B