Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $718,000 and have a useful We of six years. The system yields an incremental after-tax income of $210,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $70,000 b. A machine costs $500,000, has a $44,000 salvage value, is expected to last eight years, and will generate an after-tax income of $120,000 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.) Complete this question by entering your answers in the tabs below. Required A Required A new operating system for an existing machine is expected to cost $718,000 and have a useful life of six years. The system yields an incremental after-tax income of $210,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $70,000. (Round your answers to the nearest whole dollar) Bolnct Chart Amount X PV Factor Present Value Cash Flow Annual cash flow Residual value Net present value Required a Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $718,000 and have a useful life of six years. The system yields an incremental after-tax income of $210,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $70,000 b. A machine costs $500,000, has a $44,000 salvage value, is expected to last eight years, and will generate an after-tax income of $120,000 per year after straight-line depreciation 14 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 S1, and FVA 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 machine costs $500,000, has a $44,000 salvage value, is expected to last eight years, and will generate an after-tax income of $120,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar) Select Chart Amount * PV Factor Present Value Cash Flow Annual cash flow Residual value Net present value