Dangerfield Industrial Systems Company (DISC) is trying to decide between two di

Question

Dangerfield Industrial Systems Company (DISC) is trying to decide between two different conveyor belt systems. System A costs $430,000, has a four-year life, and requires $110,000 in pretax annual operating costs. System B costs $570,000, has a six-year life, and requires $98,000 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 will not be replaced when it wears out. If the tax rate is 34 percent and the discount rate is 11 percent, the NPV for project A is $_____ and the NPV for project B is _______ .

Explanation / Answer

Are you sure you have not missed something?? the question does not sate the operating profit or Profit before tax

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