7-56. A company with an effective income tax rate and a capital gains tax of 40% and a MARR of 12% must choose between two mutually exclusive projects. Determine which project should be selected by conducting a present worth analysis (7.9) ALT 1 ALT 2 Initial cost $11,000 $33,000 Uniform annual benefit 3,000 9,000 Depreciation method Straight line MACRS Depreciable life 3 years 3 years IRS approved salvage value for depreciation purposes 2,000 0 Useful life 5 years 5 years Actual market value at end of useful life