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Make a cost comparison between two conveyor systems for transporting raw materials. System A Installed cost $25,000 Annual operating cost 6,000 System B $15,000 11,000
Make a cost comparison between two conveyor systems for transporting raw materials.
System A
Installed cost $25,000 Annual operating cost 6,000
System B
$15,000 11,000
The service life of each system is 5 years and the write-off period is 5 years. Use straight-line depreciation and assume no salvage value for either system. At what rate of return after taxes would B be more attractive than A?
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