a. A new operating system for an existing machine is expected to cost $701,000 and have a useful life of six years. The system yields an incremental after-tax income of $205,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $65,000. b. A machine costs $490,000, has a $42,000 salvage value, is expected to last eight years, and will generate an after-tax income of $115.000 per year after straight-line depreciation. Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) X Answer is complete but not entirely correct. 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 $701,000 and have a useful life of six years. The system yields an incremental after-tax income of $205,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $65,000. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount = Annual cash flow Residual value IS PV Factor 3.9980 X 0.4800 205,000 X X 65,000 Present Value of an Annuity of 1 os Present Value of 1 S Present value of cash inflows Immediate cash outfiows Net present value Present Value 819,590 31,200 850,790 (701,000) 149,790 X $ S Complete this question by entering your answers in the tabs below. Required A Required B A machine costs $490,000, has a $42,000 salvage value, is expected to last eight years, and will generate an after-tax income of $115,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount Annual cash flow PV Factor 4.7990 % = 0.3760 X = $ $ 115,000 X 42,000 x Present Value 551.885 15,792 567,677 (490,000) Residual value Present Value of an Annuity of 1 Present Value of 1 Present value of cash inflows Immediate cash outflows Net present value $ $ $ 77,677 X