1. Arizona Company is considering two investments. The relevant data follows:

Project A Project B Cost $205,010 $259,770 Annual cash savings (end of year) $50,000 $60,000 Terminal salvage value $0 Estimated useful life in years 5 5 Minimum desired rate of return 10% 10% Method of depreciation Straight-line Straight-line Present Value Present Value Of $1 of Ordinary for 5 periods Annuity of $1 for 5 periods 5% 0.7835 4.3295 6% 0.7473 4.2124 7% 0.713 4.1002 8% 0.6806 3.9927 10% 0.6209 3.7908 12% 0.5674 3.6048 14% 0.5194 3.4331