How did he get i=26% ?

We can use incremental rate of return analysis on MEAs with unequal lives Equate the MEAs annual worths (AW) over their respective lives. $3,500$5,000 $1,255$1,480 Capital Investment Annual Cash Flow Useful Live (years) 4 -83, 500(A/P, i1%, 4) + $1,255--$5,000(A/P, i" %, 6) + $1.480 Solving, we find 26%, so Alt B is preferred