The following cost estimates apply to independent equipment alternatives A and B. The before-tax ROR required is 20%

	A	B
Installed cost	$100.000	$40,000
Operating costs	$5.000 at the end of year 1 and increasing by $ l.000 per year for 20 years	$10,000 at the end of year 1 and increasing by $2.000 per year for 10 years
Overhaul costs every 5 years	$10.000	None required
Economic Life	20 years	10 years
Salvage value at end of life (just overhauled)	$20,000	$10,000

a) Compare the NPV of each using a study period of 20 years

b) Compare the internal equivalent cost