Compare the alternatives shown below on the basis of their capitalized costs, using a nominal interest rate 12% per year, compounded quarterly. Calculate the Capitalized Cost for each alternative and select the best option. Do not select until you have calculated the Capitalized Cost for each alternative.

Alternative A

Alternative B

First Cost in $

-200,000

-900,000

Quarterly income, $/quarter

+36,000

+45,000

Salvage value, $

+50,000

0.00

Life, in quarters

12 quarters

Select Alternative B with CCB= +$1,500,000

Select Alternative B with CCB= +$600,000

Select Alternative A with CCA= +$592,366

Select Alternative A with CCA= +$647,700