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Tommy Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $ 2 7 0 , 0 0 0

Tommy Industrial Systems Company is trying to decide between two different conveyor
belt systems. System A costs $270,000, has a 4-year life, and requires $77,000 in pretax
annual operating costs. System B costs $350,000, has a 6-year life, and requires
$71,000 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 21 percent and the discount rate is 8 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.,32.16.)

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