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a. A new operating system for an existing machine is expected to cost $570,000 and have a useful life of six years. The system yields
a. A new operating system for an existing machine is expected to cost $570,000 and have a useful life of six years. The system yields an incremental after-tax income of $225,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $14,200. b. A machine costs $520,000, has a $38,300 salvage value, is expected to last eight years, and will generate an after-tax income of $88,000 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 B A new operating system for an existing machine is expected to cost $570,000 and have a useful life of six years. The system yields an incremental after-tax income of $225,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $14,200. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount PV FactorPresent Value Annual cash flow Residual value Net present value Required A Required B A machine costs $520,000, has a $38,300 salvage value, is expected to last eight years, and will generate an after-tax income of $88,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Cash Flow Annual cash flow Residual value Select Chart Amount PV Factor Present Value Net present value KRequired A RequiredB
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