A biotech company has an effective income tax rate of 40%. Recaptured depreciation is also taxed at the rate of 40%. The company must choose one of the following mutually exclusive cryogenic freezers for its tissue samples. The after-tax MARR is 12% per year.

What is after-tax present worth of freezer 1? (use 25% as the effective income tax rate for freezer 1)

What is after-tax present worth of freezer 2? (use 25% as the effective income tax rate for freezer 2)

Which freezer will you choose based on after-tax present worth?