A company is considering two mutually exclusive alternatives.

What would be the "advantage" in annual terms of Alternative B versus Alternative A at 15% interest?

Select one:

a. $ 3500 b. $ 7436 c. Alternative B does not have an annual advantage over Alt. A at 15% interest. d. $ 3020

Alt. A Alt. B initial cost Annual costs O&M Annual savings Residual value Useful life $42,500 $6,000 $18,500 $12,000 $70,000 $4,000 $20,000 $25,000 3 years 6 years