Problem B An electronics manufacturing company (asset class 36.0, Table 6.2) is evaluating two cost alternatives A and B to upgrade a workstation. The after-tax TREMA is 8% per year and the effective tax rate is 40% per year. Determine which alternative is selected for consideration: 1) assumption of repetition 2) assumption of simultaneous termination 3) assumption of simultaneous termination with a 4-year study period using the implicit market value technique

Alternatives:	A	B
Capital investment	$ 40000	$ 50000
Annual operating expenses	$ 5600	$ 3200
Alternative Lifetime	6 year	8 year
Market value NPV	$ 8000	$5000
SMRAC (SAD) SMRAC (SGD) depreciation method	SMRAC (SAD)	SMRAC (SGD)