39. A granary has two options for a conveyor used in the manufacture of grain for transporting, fi lling, or emptying. One conveyor can be purchased and installed for $70,000 with $3000 salvage value after 16 years. The other can be purchased and installed for $110,000 with $4000 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%, and a MARR of 9% 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?