5. A firm must decide between two designs A and B. Their effective income rate is 50%. If the desired after-tax return on investment is 8% per year, which alternative should be chosen? *Use repeatability assumption and AW method. Detail analysis is required* (20%) 1 B Capital investment 40000 MV at end of useful life 4000 Annual expenses 2500 Depreciation method MACRS (GDS) With 5- year recovery period Useful life (in years) 8 A 30000 6000 3000 SL to zero book value over 5 years 6