Calculating EAC) 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 $90,000 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 $(90,000) $(55,000) 1 $(19,000) $(7,000) 2 $(19,000) $(7,000) 3 $(19,000) $(7,000) 4 $(19,000) 5 $(19,000) 6 $(19,000) 7 $(19,00(

a. Calculate each project's EAC, given a discount rate of 10 percent.

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