Two hazardous environment facilities are being evaluated, with the projected life of each facility being 10 years. The cash flows for each facility are shown in the table below.
The company uses a MARR of 14%. Based on the rate of return, which is the most desirable alternative?
Cash Flows Alternatives
A B
First Cost $450,000 $615,000
M & O Costs $15,000 $10,000
Annual Benefit $85,000 $158,000
Salvage Value $45,000 $65,000