1. GEO Labs is evaluating the acquisition of a light truck that will increase the speed and amount of area serving. The acquisition of this light truck at a cost of $100,000 will result in earnings before depreciation and taxes of $34,000 in years 1 to 3, and $14,500 in years 4 to 6. The company tax rate is 30% and cost of capital is 10%

2. Thompson medical devices is evaluating the acquisition of a computer system. The acquisition of this computer system at a cost of $120,000 will result in earnings before depreciation and taxes of $40,000 in years 1 to 3, and $18,000 in years 4 to 6. The company tax rate is 30% and cost of capital is 10%