E I 1. A construction firm has decided to purchase an Equipment to bre Two different ent companies manufacture the Equipment that will fultil the functional requie the construction firm. The construction f companies. presented as follows firm will purchase the most economical one from one of these The alternatives s have different useful lives. The cash flow details of both alternatives are purchase cost AED 30S0000, Annual operating cost AED. 40000 at useful life, Annual Company-A Equipment: Initial cont income AED.560000, Expected salvage Company-B Equipment: Initial purchase cost ALD asing by AED.2000 in the subsequent years till the end of useful life, value ALD.1050000, Useful life 6 vears. 4000000, Annual operating cost AED 5s000, AED 5000 in the revenue to be generated AED 600000 at the end of 1a year and increasing ty . 1000000, Useful life 12 subsequent years till the end of useful sfe, Expected salvage value AED years. Using present worth method, 7% per year. find out the most economical alternative at the interest rate of