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a. A new operating system for an existing machine is expected to cost $730,000 and have a useful life of six years. The system ylelds
a. A new operating system for an existing machine is expected to cost $730,000 and have a useful life of six years. The system ylelds an incremental after-tax income of $170,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,000 b. A machine costs $430,000, has a $29,900 salvage value, is expected to last eight years, and will generate an after-tax Income of $84,000 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 S1 (Use approprlate factor(s) from he tables provlded.) 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 $730,000 and have a useful life of six years. The system yields an incremental after-tax income of $170,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,000. (Round your answers to the nearest whole dollar.) Cash Flow Annual cash flow Residual value Select Chart Amount x PV FactorPresent Value Net present value RequiredB > Required A A machine costs $430,000, has a $29,900 salvage value, is expected to last eight years, and will generate an after-tax income of $84,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Cash Flow Annual cash flow Residual value Select Chart Amount x PV Factor Present Value Net present value RequiredB Required A
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