Consider the following two mutually exclusive alternatives:

Alternative 1 Alternative 2

Cost $22,000 $37,000

Uniform annual benefit 3,000 5,000

Useful life, in years infinity 15

Alternative 2 may be replaced with an identical item every 15 years at the $37,000 cost and will always have the $5,000 uniform annual benefit. Assume an 8% interest rate. What is the uniform annual cash flow of each alternative and which alternative is the best? <10 pts>

Answers: Cashflow_Alt1 = __________, Cashflow_Alt2 = __________, Best Alternative? _________

Reasoning/Work: