The expected market for the chemical is 16 years. An 18% interest rate is used.

(a) Compute the Net Present Worth (NPW) for alternative A.

(b) Compute the Net Present Worth (NPW) for alternative B.

\begin{tabular}{rrrrr} & \begin{tabular}{r} First \\ Cost \end{tabular} & \begin{tabular}{r} O\&M \\ Cost/year \end{tabular} & Salvage & \multicolumn{1}{c}{ Life } \\ \hlineA & $14M & $3.5M & $2M & 8 years \\ B & 22M & 3M & 7.5M & 16 years \\ \hline \end{tabular}