Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. System A costs $355,000, has a 4-year life, and requires $145,000 in pretax annual operating costs. System B costs $435,000, has a 6-year life, and requires $139,000 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 23 percent and the discount rate is 9 percent.

Calculate the EAC for both conveyor belt systems. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Which conveyor belt system should the firm choose?

• System A

• System B