The cash flows for the two pieces of construction equipment are shown below:
Year Alt. A Alt. B
0 -$2,500 -$2,000
1 $1,050 $800
2 $950 $350
3 $800 $350
4 $650 $350
5 $500 $350
6 $500 $400
7 $500 $500
8 $500 $600
Based on a 4% interest rate, which alternative should be selected?