(Related to Checkpoint 11.2) (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 $75,000 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: a. Calculate each project's EAC, given a discount rate of 8 percent. b. Which of the alternatives do you think Barry should select? Why? a. Alternative A's EAC at a discount rate of 8% is $ (Round to the nearest cent.) Alternative B's EAC at a discount rate of 8% is $ (Round to the nearest cent.) b. Which of the alternatives do you think Barry should select? Why? (Select the best choice below.) O A. This cannot be determined from the information provided. B. Alternative B should be selected because its equivalent annual cost is less per year than the annual equivalent cost for Alternative A. OC. Alternative A should be selected because its equivalent annual cost is less per year than the annual equivalent cost for Alternative B. OD. Alternative B should be selected because it has the highest NPV. n Year Alternative B 0 1 Alternative A $(75,000) (18,000) (18,000) (18,000) (18,000) (18,000) (18,000) (18,000) $(55,000) (5,000) (5,000) (5,000) 2 3 4 5 6 7