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Rust Industrial Systems is trying to decide between two different conveyor belt systems. System A costs $ 2 6 8 , 0 0 0 ,

Rust Industrial Systems is trying to decide between two different conveyor belt systems. System A costs $268,000, has a four-year life, and requires $82,000 in pretax annual operating costs. System B costs $378,000, has a six-year life, and requires $76,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 22 percent and the discount rate is 10 percent. Calculate the EAC for both conveyor belt systems.

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