5.00 points Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems
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5.00 points Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems System A costs $248,000, has a four-year life, and requires $77,000 in pretax annual operating costs. System B costs $348,000, has a six-year life, and requires $71,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Whichever project is chosen, it will not be replaced when it wears out. The tax rate is 30 percent and the discount rate is 9 percent Calculate the NPV for both conveyor belt systems. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16.) System A System B A A NPV 111,849.83 -109876.08 Which conveyor belt system should the firm choose? System B System A
Related Book For
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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