Question
In: Finance
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
|
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $335,000, has a four-year life, and requires $129,000 in pretax annual operating costs. System B costs $415,000, has a six-year life, and requires $123,000 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 24 percent and the discount rate is 9 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.) |
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS,
FEEL FREE TO ASK. THUMBS UP PLEASE
jeff jeffy answered 2 years agoRelated Solutions
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Letang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$335,000, has a four-year life, and requires $129,000 in pretax
annual operating costs. System B costs $415,000, has a six-year
life, and requires $123,000 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 24 percent
and the discount rate is 9 percent.
Calculate the...
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Letang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$325,000, has a four-year life, and requires $121,000 in pretax
annual operating costs. System B costs $405,000, has a six-year
life, and requires $115,000 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 project is
chosen, it will not be replaced when it wears out. The tax...
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Letang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$355,000, has a four-year life, and requires $145,000 in pretax
annual operating costs. System B costs $435,000, has a six-year
life, and requires $139,000 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 project is
chosen, it will not be replaced when it wears out. The tax...
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Letang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$295,000, has a four-year life, and requires $97,000 in pretax
annual operating costs. System B costs $375,000, has a six-year
life, and requires $91,000 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 21 percent
and the discount rate is 9 percent.
Calculate the...
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Letang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$285,000, has a four-year life, and requires $89,000 in pretax
annual operating costs. System B costs $365,000, has a six-year
life, and requires $83,000 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 project is
chosen, it will not be replaced when it wears out. The tax...
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Letang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$265,000, has a four-year life, and requires $73,000 in pretax
annual operating costs. System B costs $345,000, has a six-year
life, and requires $67,000 in pretax annual operating costs. 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...
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Letang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$290,000, has a four-year life, and requires $93,000 in pretax
annual operating costs. System B costs $370,000, has a six-year
life, and requires $87,000 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 8 percent.
Calculate the...
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Letang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$280,000, has a four-year life, and requires $85,000 in pretax
annual operating costs. System B costs $360,000, has a six-year
life, and requires $79,000 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 23 percent
and the discount rate is 10 percent. calculate the...
Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Letang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$300,000, has a four-year life, and requires $101,000 in pretax
annual operating costs. System B costs $380,000, has a six-year
life, and requires $95,000 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 project is
chosen, it will not be replaced when it wears out. The tax...
Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
Lang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. System A costs
$204,000, has a four-year life, and requires $66,000 in pretax
annual operating costs. System B costs $288,000, has a six-year
life, and requires $60,000 in pretax annual operating costs.
Suppose LISC 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...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What...
- How would you use SAS Enterprise Miner to create a neural network model of your example?
- Explain the use of neural networking modeling in predictive analytics.
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
- X Company is considering the purchase of a new processor that costs $200,000. Shipping and setup...
- There are a large number of tasks involved in information technology and programming, and many of...
ADVERTISEMENT