You are asked to compare the following mutually exclusive projects on an after-tax basis. Your firm uses an after-tax MARR of 25%, and has a 50% tax rate. Use any equivalent worth or rate or return method, and appropriate assumptions, and offer a recommendation. Data is below:

Data Item Alternative Jay Alternative Rome First cost $24,000 $56,000 Annual costs $7,500 $4,000 Annual savings $21,000 $40,000 Salvage value $15,000 $30,000 Useful life 4 years 6 years Depreciation method MACRS, 3-year class life 100% Bonus Financing of first cost? No, use 100% equity sources Yes, borrow 50% of the first cost with a 4-year loan. Repayment involves annual interest only, then a single balloon payment on the principal at loan due date. Annual loan interest is 10%