A company is considering the replacement of existing plastic pipes with copper pipes. The following table gives a comparison of the capital investments, lives, salvage values, and so on of the two mutually exclusive alternatives under consideration:

Depreciation amounts are calculated with the SL method, the income tax rate of 40%, and after-taxes MARR is 12% per year.

1, What is after-taxes AW of Plastic?

2, What is after-taxes AW of Copper?

Plastic Copper Capital investment $5,000 $10,000 Useful (class) life 5 years 10 years Salvage value for depreciation purposes $1,000(=SV) $5,000(= SV10) Annual expenses $300 $100 Market value at end of useful life $0 SO