Which proposal should be accepted for a 10-year production horizon?

It is estimated that the annual sales of an energy saving device will be 25000 the first year and i Show more It is estimated that the annual sales of an energy saving device will be 25000 the first year and increase by 10000 per year unitl 55000 units are sold during the fourth year. In the fifth year and each year thereafter the sales will decrease by 5000 units per year until reaching 25000 in year ten. Proposal A is to purchase manufacturing equipment costing $125000 with an estimated salvage value of $20000 at the end of 10 years.Proposal B is to purchase equipment costing $285000 with an estimated salvage value of $50000 at the end of 10 years. The variable manufacturing cost per unit under proposal A is estimated to be $0.80 but is estimated to be only $0.26 under proposal B. If the interest rate is 9% Which proposal should be accepted for a 10-year production horizon? please show all work Show less

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