Question: a. A new operating system for an existing machine is expected to cost $680,000 and have a useful life of six years. The system yields


a. A new operating system for an existing machine is expected to cost $680,000 and have a useful life of six years. The system yields an incremental after-tax income of $215,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $20,400. b. A machine costs $600,000, has a $30,200 salvage value, is expected to last eight years, and will generate an after-tax income of $66,000 per year after straight-line depreciation. Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1. EV of $1. PVA of $1 and EVA of $1) (Use appropriate factor(s) from the tables provided.) Complete this question by entering your answers in the tabs below. Required A Required B A new operating system for an existing machine is expected to cost $680,000 and have a useful life of six years. The system yields an incremental after-tax income of $215,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $20,400. (Round your answers to the nearest whole dollar.) Select Chart Cash Flow Amountx PV FactorPresent Value Annual cash flow Residual value Net present value Required A Required B Complete this question by entering your answers in the tabs below RequiredA Required B A machine costs $600,000, has a $30,200 salvage value, is expected to last eight years, and will generate an after-tax income of $66,000 er year after straight-line depreciationRound your answers to the nearest whole dollar.). Cash Flow Annual cash flow Residual value Select Chart Amount xPV Factor Present Value Net present value K Required A Required B
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