A municipal government has two alternatives under consideration. Both include short-term use of land that otherwise will just sit unused for 5 years, after which it will be developed as a recycling center. The two short-term alternatives being considered include (1) facilities for baseball and soccer for children's leagues that can be used for the full 5 years, and (2) a temporary home for "citizen garden plots" while a new area is cleared and converted; this temporary home will be needed for only 3 years. MARR is 7 percent, and the planning horizon is 5 years. The baseball and soccer facilities will cost \(\$ 120,000\) and have a salvage value of \(\$ 15,000\) after 5 years, bringing an estimated benefit to citizens of \(\$ 50,000\) per year. The city garden plots will have an initial cost of \(\$ 70,000\) and a salvage value of \(\$ 20,000\) after 3 years, and will provide benefits of \(\$ 45,000\) per year. No other use for the land is planned in years 4 and 5 if the citizen garden plots are selected. At a budget meeting, the city planner, an avid gardener, recommends Alternative 2, "citizen garden plots," based upon an annual equivalent \(B-C\) analysis as follows:

Either accept or correct the analysis.

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- * AEB-C (1) (7%) = $50,000 ($120,000 (A|P 7%,5) - $15,000 (A|F 7%,5)) = $23, 341.48/year AB c (2) (7%) = $45,000 ($70,000 (A|P 7%,3) - $20,000 (A|F 7%,3)) = $24,547.42/year - *