Barry Boswell is a financial analyst for Dossman Metal$$ Works, Inc. and he is analyzing two alternative configurations for the$$ firm's new plasma cutter shop. The two$$ alternatives, denoted A and B$$ below, will perform the same$$ task, but alternative A will cost $$$$85,000$ to$$ purchase, while alternative B will cost only $$55,000.$Moreover$,$ the two alternatives will have very different cash flows and useful lives. The$$ after$-$tax costs for the two projects are as$$ follows:

Year Alternative A Alternative B

$0$ $$(85,000)$ $$(55,000)$

$1$ $$(21,000)$ $$(8,000)$

$2$ $$(21,000)$ $$(8,000)$

$3$ $$(21,000)$ $$(8,000)$

$4$ $$(21,000)$

$5$ $$(21,000)$

$6$ $$(21,000)$

$7$ $$(21,000)$

a$.$ Calculate each$$ project's EAC, given a discount rate of $12$ percent.

b$.$ Which of the alternatives do you think Barry should$$ select? Why?

c$.$ Alternative$$ A$\text{'}$s EAC at a discount rate of $12\%$ is $?$