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Lang Industrial Systems company is trying to decid...

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Lang Industrial Systems company is trying to decide between two different conveyor belt systems. system A costs 240000, has a four-year life, and requires 75000 in pretax annual operating costs. System B costs 340000, has a six-year life, and requires 69000 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. if the tax rate is 34 percent and the discount rate is 8 percent, which project should the firm choose?

 

Paper#4194 | Written in 18-Jul-2015

Price : $25
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