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a. A new operating system for an existing machine is expected to cost $630,000 and have a useful life of six years. The system yields

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a. A new operating system for an existing machine is expected to cost $630,000 and have a useful life of six years. The system yields an incremental after-tax income of $200,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $29,600 b. A machine costs $590,000, has a $24.200 salvage value, is expected to last eight years, and will generate an aftfer-tax income of $86,000 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 nvestment (PV of $1, FV of S1, PVA of $1 and FVA of S1) (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 $630,000 and have a useful life of six years. The system yields an incremental after-tax income of $200,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $29,600. (Round your answers to the nearest whole dollar.) h Flow Select Chart Amount PV FactorPresent Value Annual cash flow Residual value Net present value Required B

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