Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. System A costs $224,000, has a four-year life, and requires $71,000 in pretax annual operating costs. System B costs $318,000, has a six-year life, and requires $65,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. HISC always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 30 percent and the discount rate is 9 percent.

What is the EAC for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. A negative answer should be indicated by a minus sign.)

	EAC
System A	$
System B	$

Which conveyor belt system should the firm choose?

	System B
	System A