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97,000 in pretax annual operating costs. System B costs $375,000, has a six-year life, and requires $91,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Whichever project is chosen, it will not be replaced when it wears out. The tax rate is 21 percent and the discount rate is 9 percent.

Calculate the NPV for both conveyor belt systems

8 Letang Industrial Systems Company (LISC) is trying to decide between tw conveyor belt systems. System A costs $295,000, has a four-year life, an $97,000 in pretax annual operating costs. System B costs $375,000, has a s and requires $91,000 in pretax annual operating costs. Both systems depreciated straight-line to zero over their lives and will have zero salvi Whichever project is chosen, it will not be replaced when it wears out. The ta percent and the discount rate is 9 percent. 0/4 polnts awarded Scored Calculate the NPV for both conveyor belt systems. (A negative answer indicated by a minus sign. Do not round intermediate calculations and answers to 2 decimal places, e.g., 32.16.) $ System A System B -152.199.76 % -142,359.92 X $ Which conveyor belt system should the firm choose? System B System A