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The Templeton Manufacturing and Distribution Company ofTacoma, Washington, is contemplating the purchase of a new conveyor belt system for one of its regional distribution facilities. Both alternatives will accomplish the same task but the Eclipse Model is substantially more expensive than the Sabre Model and will not have to be replaced for 10years, whereas the cheaper model will need to be replaced in just 5 years. The costs of purchasing the two systems and the costs of operating them annually over their expected lives is providedbelow

a. The NPV for Eclipse at a discount rate of 8 is ?

The NPV for Sabre at a discount rate of 8% is ?

b.Eclipse's equivalent annual cost(EAC) at a discount rate of 8% is ?

Sabre's equivalent annual cost(EAC) at a discount rate of 8% is ?

0

$(1,350,000)

$(850,000)(sabre)

1

(27,000)

(52,000)(sabre)

2

(28,000)

(52,000)(sabre)

3

(28,000)

(57,000)(sabre)

4

(28,000)(

(57,000)(sabre)

5

(39,000)

(75,000)(sabre)

6

(39,000)

7

(39,000)

8

(39,000)

9

(39,000)

10

(39,000)