Use Present Worth Analysis $to$ determine whether Alternative $AorB$ should $be$ chosen. Items are identically replaced $at$ the end $of$ their useful lives.

Assume $an$ interest rate $of12\%$ per year, compounded annually.

Alternative $A$

Alternative $B$

Initial Cost

$410$

$1,025$

Annual Benefit

$60$

$112$

Salvage Value

$182$

$290$

Useful Life $(yrs)$

$2$

$3$