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a. A new operating system for an existing machine is expected to cost $750,000 and have a useful life of six years. The system yield
a. A new operating system for an existing machine is expected to cost $750,000 and have a useful life of six years. The system yield an incremental after-tax income of $225,000 each year after deducting its straight-line depreciation. The predicted salvage value the system is $24,200 b. A machine costs $530,000, has a $27,500 salvage value, is expected to last eight years, and will generate an after-tax income of $90,000 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 $0 (Use appropriate factorts) from the tables provided Complete this question by entering your answers in the tabs below. Required A Required 8 A new operating system for an existing machine is expected to cost $750,000 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 deprgciation. The predicted salvage value of the system is $24,200. (Round your answers to the nearest whole dollar.) PV Factor Present Value Select Chart Amount Cash Flow Annual cash flow Residual value Net present value Required
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