Tanaka Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $$275,000,$ has a $4-$year life, and requires $$81,000$ in pretax annual operating costs. System B costs $$355,000,$ has a $6-$year life, and requires $$75,000$ 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 $9$ percent. Calculate the EAC for both conveyor belt systems. $($A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$Problem $6-16$ Comparing Mutually Exclusive Projects

Tanaka Industrial Systems Company is trying to decide between two different conveyor

belt systems. System A costs $$275,000,$ has a $4-$year life, and requires $$81,000$ in pretax

annual operating costs. System B costs $$355,000,$ has a $6-$year life, and requires

$$75,000$ 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 $9$ percent. Calculate

the EAC for both conveyor belt systems. $($A negative answer should be indicated by a

minus sign. Do not round intermediate calculations and round your answers to $2$

decimal places, e$.$g$.,32\mathrm{.}16.)$

Which conveyor belt system should the firm choose?

System A

System B