A cost analysis is to be made to determine what, if anything, should be done in a situation offering three "do-something" and one "do-nothing" alternatives. Estimates of the cost and benefits are as follows:

Alternatives            1       2        3          4

Cost                    500     600    700        0

UAB                    120     100    100        0

Salvage                0       200     100       0

Life(yrs)                5         5        10        0

Use a 10-year analysis period for the four mutually exclusive alternatives. At the end of Year 5, Alternatives 1 and 2 may be replaced with identical alternatives ( with the same cost, benefits, salvage value, and useful life). (a) If a 6% interest rate is used, which alternative should be selected? (b) If a 10% interest rate is used, which alternative should be selected?