Question
Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $290,000 has a four-year life, and requires
Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor 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 a zero salvage value. whichever period is chosen it will not be replaced when it wears out. if the tax rate is 34 percent and the discount rate is 8 percent, which project should the firm choose.
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