a. A new operating system for an existing machine is expected to cost $720,000 and have a useful life of six years. The system yields an incremental after-tax income of $165,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,400. b. A machine costs $470,000, has a $24,800 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 12% 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 $720,000 and have a useful life of six year system yields an incremental after-tax income of $165,000 each year after deducting its straight-line depreciat predicted salvage value of the system is $11,400. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Annual cash flow Future Value of 1 Residual value Amount x PV Factor $ 283,100 x 11 Present Value 0 0 11 Net present value Heels, a shoe manufacturer, is evaluating the costs and benefits of new equipment that would custom fit ach pair of athletic shoes. The customer would have his or her foot scanned by digital computer quipment; this information would be used to cut the raw materials to provide the customer a perfect fit. The new equipment costs $112,000 and is expected to generate an additional $45,000 in cash flows for ive years. A bank will make a $112,000 loan to the company at a 12% interest rate for this equipment's purchase. Compute the recovery time for both the payback period and break-even time. (PV of $1, FV of $1, VA 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. Payback Period Break even time Compute the recovery time for the payback period. Payback Period Choose Numerator: I Choose Denominator: 1 Payback Period Payback period