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#5: Coolbeans is trying to decide between two different ice cream production systems. System K costs $320,000, has a four-year life, and requires $70,000 in pretax annual operating costs. System L costs $375,000, has a six-year life, and requires $80,000 in pretax annual operating costs. Both systems are to be fully depreciated straight-line to zero over their lives and will have zero salvage value. The tax rate is 34 percent and the discount rate is 8 percent. a) Whichever system is chosen, Coolbeans will not replace it when it wears out. Which system should the firm choose? b] Whichever system is chosen, when it wears out, Coolbeans will replace it indenitely. Which system should the rm choose