A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for \($70,000\) with \($3,000\) salvage value after 16 years.

The other can be purchased and installed for \($110,000\) with \($4,000\) salvage value after 16 years Operation and maintenance for each is expected to be \($18,000\) and \($14,000\) per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 40 percent, and has a MARR of 9 percent after taxes.

a. Determine which alternative is less costly, based upon comparison of after-tax annual worth.

b. What must the cost of the second (more expensive) conveyor be for there to be no economic advantage between the two?