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?