Alternative Methods I and II are proposed for a security operation. The following is comparative information:

	Method1	method 11
Initial Investment	$10,000	$40,000
Useful (ADR) Life	5 years	10 years
Terminal Market value	$1,000	$5,000
Annual expenses	$14,500	$7,000

Determine which is the better alternative based on an after-tax annual cost analysis with an effective income tax rate of 40% and an after-tax MARR of 15%, assuming the following methods of depreciation:(7.9)

A. SL

B. MACRS

Note: I know the solution is on chegg but i dont understand what are they doing, could please someone solve this problem for me with steps and explain how they arrive at the answer.

Thanks