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Rust Industrial Systems is trying to decide between two different conveyor belt systems. System A costs $ 2 2 0 , 0 0 0 ,
Rust Industrial Systems is trying to decide between two different conveyor belt systems. System A costs $ has a fouryear life, and requires $ in pretax annual operating costs. System B costs $ has a sixyear life, and requires $ in pretax annual operating costs. Both systems are to be depreciated straightline 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 percent and the discount rate is percent. Calculate the EAC for both conveyor belt systems.
Note: Your answers should be negative values and indicated by minus signs. Do not round intermediate calculations and round your answers to decimal places, eg
tableSystem ASystem B
Which conveyor belt system should the firm choose?
System A
System B
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