Consider the two mutually exclusive projects in Table P5.49.
Salvage values represent the net proceeds (after tax) from disposal of the assets if they are sold at the end of each year. Both projects Bl and B2 will be available (or can be repeated) with the same costs and salvage values for an indefinite period.
(a) Assuming an infinite planning horizon, which project is a better choice at MARR = 12%?
(b) With a 10-year planning horizon, which project is a better choice at MARR = 12%?

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B1 B2 Cash Flow Salvage Value Salvage Value Flow 0 S20,000 1 2,000 22.000 32.000 42.000 2,000 -$17,000 10,000 8,000 5,000 3,000 2,000 -2,500 9,000 6,000 3,000 -2.500