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Hagar Industrial Systems Company ( HISC ) is trying to decide between two different conveyor belt systems. System A costs $ 2 9 0 ,
Hagar Industrial Systems Company HISC is trying to decide between two different conveyor belt
systems. System A costs $ has a fouryear life, and requires $ in pretax annual operating
costs. System B costs $ has a sixyear life, and requires $ in pretax annual operating costs.
Both systems are to be depreciated straightline to zero over their lives and will have zero salvage value.
Whichever system is chosen, it will not be replaced when it wears out. If the tax rate is percent and the
discount rate is percent, which system should the firm choose?
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