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(25 points) An exploration company plans to purchase a new drilling rig. The following information is prepared for the economic evaluation of two alternatives. The

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(25 points) An exploration company plans to purchase a new drilling rig. The following information is prepared for the economic evaluation of two alternatives. The after-tax MARR is 8% per year and the effective tax rate is 35%. Using SL depreciation, select an alternative. Alternative DR1 DR2 Initial investment $290,000 $245,000 Annual net benefits $55,000 $55,000 Salvage value $5,000 $4,000 Useful life 10 years 8 years

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