Conveyor systems for transporting raw materials

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Reference no: EM13911279

Make a cost comparison between two conveyor systems for transporting raw materials.

System A

Installed cost $25,000 Annual operating cost 6,000

System B

$15,000 11,000

The service life of each system is 5 years and the write-off period is 5 years. Use straight-line depreciation and assume no salvage value for either system. At what rate of return after taxes would B be more attractive than A?

Reference no: EM13911279

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