4. 6.61 Scientific Instruments, Inc. uses a MARR of 8% per year. The company is evaluating a new process to reduce water effluents from its manufacturing processes. The estimates associated with the process follow. In evaluating the process on the basis of a rate of return analysis, the correct equation to use is Table Summary: Table divided into 2 columns with the headings marked as: Alternative and I.

Alternative I First cost, $ −40,000 NCF, $ per year 13,000 Salvage value, $ 5,000 Life, years 3 1. 0 = −40,000 + 13,000(P/A,i*,3) + 5000(P/F,i*,3)

2. 0 = −40,000(A/P,i*,3) + 13,000 + 5000(A/F,i*,3)

3. 0 = −40,000(F/P,i*,3) + 13,000(F/A,i*,3) + 5000 4. Any of the above