Peyton Manufacturing is trying to decide between two different conveyor belt systems. System A costs $$232,000,$ has a four$-$year life, and requires $$73,000$ in pretax annual operating costs. System B costs $$330,000,$ has a six$-$year life, and requires $$67,000$ in pretax annual operating costs. Both systems are to be depreciated straight$-$line to zero over their lives and will have zero salvage value. Whichever system is chosen, it will not be replaced when it wears out. The tax rate is $22$ percent and the discount rate is $8$ percent.

Calculate the NPV 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$.,32\mathrm{.}16.)$

Peyton Manufacturing is trying to decide between two different conveyor belt systems.

System A costs $$232,000,$ has a four$-$year life, and requires $$73,000$ in pretax annual

operating costs. System B costs $$330,000,$ has a six$-$year life, and requires $$67,000$ in

pretax annual operating costs. Both systems are to be depreciated straight$-$line to zero

over their lives and will have zero salvage value. Whichever system is chosen, it will not

be replaced when it wears out. The tax rate is $22$ percent and the discount rate is $8$

percent.

Calculate the NPV 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 BWhich conveyor belt system should the firm choose?

multiple choice

System A

System B