A local concrete finishing company is considering investing in newer, more productive curb forming equipment with alternatives shown below:

	A	B
Investment	40000	20000
Quarterly Revenue	3000	2000
Life	10years	5 years
Salvage	4000	3000

Use a nominal annual rate of return of 8%.

a. Calculate the simple Payback periods (in years and months) of these alternatives, which alternative would you select based on this method?

b. Using the Present Worth Method and repeatability assumption;

c. The Annual Worth method;

d. Do the methods in a, b and c result in the same selection, why or why not?

e. What is the effective annual interest rate used in evaluating these two alternatives?