A business needs an air conditioning compressor to use for 10 years. Using present value analysis and an interest rate of 3% compounded per year decide which is the best alternative.

Alternative A Alternative B

Initial cost 1000 1500

Annual maintenance cost 60 100

Useful life (years) 5 10

Residual value 200 300

Fill in the blanks:

The present value of alternative A to do the analysis is $ Answer . The present value of alternative B to do the analysis is $ Answer . The selected alternative is Answer (AoB).