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Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. System A costs $345,000, has a four-year life, and requires
Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. System A costs $345,000, has a four-year life, and requires $137,000 in pretax annual operating costs. System B costs $425,000, has a six-year life, and requires $131,000 in pretax annual operating costs. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 21 percent and the discount rate is 11 percent.
Calculate the NPV for both conveyor belt systems
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