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University Of Arkansas At Monticello Operations And Supply Chain Management Assignment Help - finance


Question - 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 $75,000 in pretax annual
operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have
zero salvage value. Whichever project is chosen, it willnot be replaced when it wears out. The tax rate
is 34 percent and the discount rate is 8 percent.
Calculate the NPV for both conveyor belt systems. (Negative amounts should be indicated by a
minus sign.Round your answers to 2 decimal places. (e.g., 32.16))
NPV
System A ??$
System B ??$

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