a. A new operating system for an existing machine is expected to cost $690,000 and have a useful life of six years. The system yields an incremental after-tax income of $255,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $ 14,600. b. A machine costs $430,000, has a $32,600 salvage value, is expected to last eight years, and will generate an after-tax income of $74.000 per year after straight-line depreciation.

a. A new operating system for an existing machine is expected to cost $690,000 and have a useful life of six years. The system yields an incremental after-tax income of $255,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $14,600. b. A machine costs $430,000, has a $32,600 salvage value, is expected to last eight years, and will generate an after-tax income of $74,000 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 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 new operating system for an existing machine is expected to cost $690,000 and have a useful life of six years. The system yields an incremental after-tax income of $255,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $14,600. (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 Required 8 > a. A new operating system for an existing machine is expected to cost $690,000 and have a useful life of six years. The system yie an incremental after-tax income of $255,000 each year after deducting its straight-line depreciation. The predicted salvage valu the system is $14,600. b. A machine costs $430,000, has a $32,600 salvage value, is expected to last eight years, and will generate an after-tax income a $74,000 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 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 $430,000, has a $32,600 salvage value, is expected to last eight years, and will generate an after-tax income of $74,000 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