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Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. System...

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Finance

Hagar Industrial Systems Company (HISC) is trying to decidebetween two different conveyor belt systems. System A costs$330,000, has a 4-year life, and requires $125,000 in pretax annualoperating costs. System B costs $410,000, has a 6-year life, andrequires $119,000 in pretax annual operating costs. Suppose thecompany always needs a conveyor belt system; when one wears out, itmust be replaced. Assume the tax rate is 23 percent and thediscount rate is 8 percent.

Calculate the EAC for both conveyor belt systems. (Anegative answer should be indicated by a minus sign.Do not round intermediate calculations and round youranswers to 2 decimal places, e.g., 32.16.)

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