9. You need to buy a new piece of equipment and you have two different options to choose from. Which option is more economical? (Ans. EUAC Alt. #1 = $9,504; EUAC Alt. #2 = $6,912; Alt. #2 is the more economical choice.) Salvage: $5,000 Useful Life: 12 years Interest: 5% Alternative 1: Initial Cost: $25,000 O and M: $7,000/yr Alternative 1: Initial Cost: $40,000 O and M: $4,000/yr Salvage: $10,000 Useful Life: 20 years Interest: 5% 10. You want to set up an investment and have the option of either paying a lump sum of $10,000 into a CD at 4% annual interest or paying a yearly annuity of $1,100 for 10 years also at 4% interest. Which of the two is the better option after 10 years? (Ans. CD = $14,800; Annuity = $13,206: CD is the better option.)