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330,000, has a 4-year life, and requires $125,000 in pretax annual operating costs. System B costs $410,000, has a 6-year life, and requires $119,000 in
330,000, has a 4-year life, and requires $125,000 in pretax annual operating costs. System B costs $410,000, has a 6-year life, and requires $119,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 23 percent and the discount rate is 8 percent. Calculate the EAC for both conveyor belt systems
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