Question: a. A new operating system for an existing machine is expected to cost $854,000 and have a useful le of six years. The system is
a. A new operating system for an existing machine is expected to cost $854,000 and have a useful le of six years. The system is an incrementalatesta income of $250.000 each year the deducting its strane deprecion The predicted salvage value of the system is $110.000 b. A machine costs $580.000, has a $60,000 Savage value is expected to tast eight years, and will generate an ater-tax income of $160,000 per year after yght-line depreciation Assume the company requires a 10% rate of retum on its investments Compute the net presentake of each potential investment E51. 31. PAS1, and FA of (Use appropriate factors from the tables provided) Complete this position by entering your answers in the tabs below. Required Required A new operating system for an editing machine is expected to cost $854,000 and have a useful life of six years. The system yields an incremental after tax income of $250,000 each year after deducting its straight-o depreciation. The predicted savage value of the system la 5110,000. (Round your answers to the nearest whole dolar) Select Chart Amount * PV Factor - Presente Annual cash fow Present Value of an Annully of 1 5 374000x 435535 1628882 Present of 1 124.000 0.5645 69990 Presentate of Chow S1690.00 854 000 Net presente 5 B44 52 Required B
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