Question
In: Finance
Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System...
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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. |
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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.) |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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. 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
$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. 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
$290,000, has a four-year life, and requires $80,000 in pretax
annual operating costs. System B costs $375,000, has a six-year
life, and requires $74,000 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
$228,000, has a four-year life, and requires $72,000 in pretax
annual operating costs. System B costs $324,000, has a six-year
life, and requires $66,000 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
$256,000, has a four-year life, and requires $79,000 in pretax
annual operating costs. System B costs $360,000, has a six-year
life, and requires $73,000 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
$256,000, has a four-year life, and requires $79,000 in pretax
annual operating costs. System B costs $360,000, has a six-year
life, and requires $73,000 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.
System A?
System...
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
$268,000, has a four-year life, and requires $82,000 in pretax
annual operating costs. System B costs $378,000, has a six-year
life, and requires $76,000 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
$236,000, has a four-year life, and requires $74,000 in pretax
annual operating costs. System B costs $336,000, has a six-year
life, and requires $68,000 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 30 percent and the
discount rate is 9 percent.
Calculate the EAC...
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
$264,000, has a four-year life, and requires $81,000 in pretax
annual operating costs. System B costs $372,000, has a six-year
life, and requires $75,000 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 34 percent and the
discount rate is 8 percent. Calculate the EAC...
Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. Systems...
Lang Industrial Systems Company (LISC) is trying to decide
between two different conveyor belt systems. Systems A cost
$24,000, has a four- year life and requires $750, 00 in pretax
annual operating cost. Systems B cost $340,000 has a six-year life,
and requires $69,000 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....
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