Question: Rust Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $365,000, has a four-year life, and requires $153,000
Rust Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $365,000, has a four-year life, and requires $153,000 in pretax annual operating costs. System B costs $445,000, has a six-year life, and requires $147,000 in pretax annual operating costs. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 25 percent and the discount rate is 11 percent. Calculate the EAC for both conveyor belt systems
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