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BOE Manufacturing 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. Suppose BOE 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.

Calculate the EAC for both conveyor belt systems.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92273018

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