Cash flows for the two pieces of construction equipment

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The cash flows for the two pieces of construction equipment are shown below:

Year Alt. A Alt. B

0 -$2,500 -$2,000

1 $1,050 $800

2 $950 $350

3 $800 $350

4 $650 $350

5 $500 $350

6 $500 $400

7 $500 $500

8 $500 $600

Based on a 4% interest rate, which alternative should be selected?

Reference no: EM131970129

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