Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $236,000, has a four-year life, and requires $74,000 in pretax annual operating costs. System B costs $336,000, has a six-year life, and requires $68,000 in pretax annual operating costs. Suppose LISC always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 30 percent and the discount rate is 9 percent.

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

EAC

System A$

System B$

Which conveyor belt system should the firm choose?

System B

System A