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Lang Industrial Systems Company ( LISC ) is trying to decide between two different conveyer belt systems. System A costs $ 2 9 0 ,

Lang Industrial Systems Company (LISC) is trying to decide between two different conveyer belt systems. System A costs $290,000, has a four-year life, and requires $80,000 in pretax annual operating costs. System B costs $375,000, has a six-year life, and requires $74,000 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 applicable tax rate is 34 percent and the discount rate is 8 percent.
a) Calculate the OCF and NPV for each project. b) Which project should the firm choose?

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