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Lang Industrial Systems Company (LISC) is trying to decide between two different conveyorbelt systems. System A costs $212,000, has a four-year life, and requires $68,000
Lang Industrial Systems Company (LISC) is trying to decide between two different conveyorbelt systems. System A costs $212,000, has a four-year life, and requires $68,000 in pretaxannual operating costs. System B costs $300,000, has a six-year life, and requires $62,000 inpretax annual operating costs. Suppose LISC always needs a conveyor belt system; when onewears out, it must be replaced. Assume the tax rate is 30 percent and the discount rate is 9percent. Which system should be chosen?
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