Question: BOE Manufacturing is trying to decide between two different conveyor belt systems. System A costs $216,000, has a four-year life, and requires $69,000 in pretax
BOE Manufacturing is trying to decide between two different conveyor belt systems. System A costs $216,000, has a four-year life, and requires $69,000 in pretax annual operating costs. System B costs $306,000, has a six-year life, and requires $63,000 in pretax annual operating costs. Suppose BOE always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 35 percent and the discount rate is 10 percent.
| Calculate the EAC for both conveyor belt systems. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places (e.g., 32.16).) |
| EAC | |
| System A | $ |
| System B | $ |
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