Problem #1 (15%) A company with an effective income tax rate and a capital gain tax of 40 percent and an after-tax MARR of 12 percent must choose from two mutually exclusive projects: Alternative 1 Alternative 2 Initial cost $1 1,000 $33,000 Uniform annual net benefits $4,000 $9,000 Depreciation method Straight line MACRS Depreciation life 3 years Salvage value $2,000 Useful life 5 years Actual market value at end of useful life $2,000 Determine which project should be selected by using present worth analysis