Calculate the EAC for both conveyor belt systems

Assignment Help Financial Management

Reference no: EM131068655

Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $240,000, has a four-year life, and requires $75,000 in pretax annual operating costs. System B costs $340,000, has a six-year life, and requires $69,000 in pretax annual operating costs. Whichever project is chosen, 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 for both conveyor belt systems.

System A=

System B=

Reference no: EM131068655

Questions Cloud

How does scope creep affect a project : How does Scope Creep affect a project?

What are the operating cash flows for this project : The Clothing Co. is looking at a project that will require and initial increase of $40,000 in net working capital and $100,000 in fixed assets. The project is expected to produce annual sales of $90,000 with associated costs of $60,000. What are the ..

Illustrate the income consumption curve : An individual consumes two goods, clothing and food. Given the information below, illustrate the income consumption curve, and the Engel curves for clothing and food.

What return is this investment offering : A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $15,000 each, with the first payment occurring today, your child’s 12th birthday. Beginning on your child’s 18th birthday, the plan w..

Calculate the EAC for both conveyor belt systems : Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $240,000, has a four-year life, and requires $75,000 in pretax annual operating costs. Calculate the EAC for both conveyor belt sys..

How can corporate social responsibility be meaningful : ASSIGNMENT BRIEF - MBALN707 -Business Ethics - How can Corporate Social Responsibility be meaningful if it is not based on formal binding legislation enforcement?

Accumulate present value or future value : Each of the following problems describes an annuity. Determine whether the amount indicated is the annuity’s present value or future value. Also, provide a 1-sentence explanation. Is the amount they are trying to accumulate a present value or future ..

Company pricing and positioning decisions : Develop at least two visual aids (e.g., charts, graphs, or tables) to support your argument.Evaluate whether the company's pricing and positioning decisions contribute to or hinder that success.Evaluate whether the strategy currently used by your ..

What is the relevance of ethics in the above scenario : What is the relevance of ethics in the above scenario?

User Account

All Pages