1. A new operating system for an existing machine is expected to cost $650,000 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 $11,600.
2. A machine costs $420,000, has a $23,900 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, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Required A Required B A new operating system for an existing machine is expected to cost $650,000 and have a useful life of six years. The sy an incremental after-tax income of $205,000 each year after deducting its straight-line depreciation. The predicte yields salvage value of the system is $11,600. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount x PV Factor Present Value Annual cash flow Residual value 0 = 0 = Net present value Required A Required B A machine costs $420,000, has a $23,900 salvage value, is expected to last eight years, and will generate income of $66,000 per year after straight-line depreciation. (Round your answers to the nearest whole dolla Cash Flow Select Chart Amount x PV Factor Present Value Annual cash flow Residual value 0 0 = Net present value KRequired A Required B