11.4 (Calculating EAC) (Related to Checkpoint 11.2 on page 370) Barry Boswell is a financial analyst for Dossman Metal Works, Inc., and he is analyzing two alternative con figurations for the firm's new plasma cutter shop. The two alternatives, denoted A and B below, will perform the same task, but alternative A will cost $80,000 to purchase, while alternative B will cost only $55,000. Moreover, the two alternatives will have very different cash flows and useful lives. The after-tax costs for the two projects are as follows: Year Alternative A Alternative B 0 $(80,000) $(55,000) 1 (20,000) (6,000) 2 (20,000) (6,000) 3 (20,000) (6,000) 4 (20,000) 5 (20,000) 6 (20,000) 7 (20,000) a. Calculate each project's EAC, given a 10 percent discount rate. b. Which of the alternatives do you think Barry should select? Why?