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(Equivalent annual cost caleulation) The Temploton Manufacturing and Distrbution Company of Tacoma, Washington, is contemplating the purchase of a new conveyor belt system for one
(Equivalent annual cost caleulation) The Temploton Manufacturing and Distrbution Company of Tacoma, Washington, is contemplating the purchase of a new conveyor belt system for one of its repional distribution focilities. Both alternatives wilt accomplish the same task but the Eclpse Model is substantialy more expensive than the Sabre Model and will not have to be replaced for 10 years, whereas the cheoper model wit need to be replaced in just 5 years. The costs of purchasing the two systems and the costs of coperafing them annualy aver their expected lives is provided below a. Templeton typicaly evaluates investments in plart improvements using a required rate of retum of 11 percent. What are the NPVis for the two systems? b. Caloulato the equivalent annual costs for the two systems. c. Based on your andysis of the two syctems using boch their NPV and EAC, which system do you recomenend the compary pick? Why? - The NPV for Eclose at a discourt rate of 11% is $ (Round to the nearest dolar) Data table
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