(Equivalent annual cost calculation) The Templeton Manufacturing and Distribution Company of Tacoma, 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 10 years, 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 provided below Templeton typically evaluates investments in plant improvements using a required rate of return of 9 percent. What are the NPVs for the two systems? b. Calculate the equivalent annual costs for the two systems c. Based on your analysis of the two systems using both their NPV and EAC, which system do you recommend the company pick? Why? a The NPV for Eclipse ata discount rate of Round to the nearest dollar) The NPV for Sabre at a discount rate of 9% is (Round to the nearest dolar) b. Eclipse's equivalent annual cost (EAC) at a discount rate of 9% is (Round to the nearest dolor) Sabre's equivalent annualcos (EAC) at a discount rate of is (Round to the nearest dollar) C. Which of the alternatives do you think Templeton should select? Why? (Select the best choice below) O A Eclipse's model should be selected because it has the highest NPV OB Eclipse's model should be selected because its equivalent annual cost is less per year than Sabre's equivalent annual con OC. Sabre's model should be selected because its equivalent annual cost is less per year than Eclipse's equivalent annual cost OD. Sabre's model should be selected because it has the highest NPV onveyor belt system for one of its regional distribution facilities. Both x whereas the cheaper model will need to be replaced in just Data Table (Equivalent annual cost calculation) The Templeton Manufacturing alternatives will accomplish the same task but the Eclipse Modelis se years. The costs of purchasing the two systems and the costs of opel Templeton typically evaluates investments in plant improvements b. Calculate the equivalent annual costs for the two systems c. Based on your analysis of the two systems using both their NPV . The NPV for Eclipse a discount rate of 9% $Pound to The NPV for Sabre at a discount rate of 9% (Round to the b. Eclip's equivalent un cont (EAC) Ma decount of Sabre's equivalent anual (EAC) at a discount rate of 9 G. Which of the atomartives do you think Templeton should selech A. Eclipse's model should be selected because it has the highes OB. Eclipse's model should be selected because its equivalent and OC. Sabe's model should be selected because ts equivalent an Click to select your answers Year Eclipse Sabre 0 $11.450.000) 5/900.000) 1 (26.000) 152.000) 2 (33.000) 152.000) (33.000) (63,000) (33.000) (63.000) (30.000) (75.000) 6 (38.000) 7 (38000) (38000) (38.000) 10 (38.000) (Click on the sono in order to copy its content into a spreadsheet) Print Done