Considering two different systems for pollution control

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Reference no: EM131342121

You are considering two different systems for pollution control. System I costs $980,000, has an eight year life, and has pre-tax operating costs of $6, 550 per year. System II costs $565,000, has a five year life, and has pre-tax operating costs of $59,000 per year. For both systems use straight line depreciation and assume neither system has any salvage value. If your tax rate is 39% and your discount rate is 12%, which do you prefer? Show me with calculations.

Reference no: EM131342121

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