a. A new operating system for an existing machine is expected to cost $590,000 and have a useful life of six years. The system yields an incremental after-tax income of $230,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $22.800. b. A machine costs $500,000, has a $37,100 salvage value, is expected to last eight years, and will generate an after-tax income of $60,000 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 51 and FVA of S1) (Use appropriate factors) 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 $590,000 and have a useful life of six years. The system yields an incremental after-tax income of $230,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $22,800. (Round your answers to the nearest Whole dollard Amount * PV Factor - Present Value | 22.800 x Cash Flow Select Chart Annual cash flow Present Value of an Annuity of 1 Residual value Present Value of 1 s Present value of cash inflows Immediate cash outflows Net present value Required B > Prev 1 of 1 II Next Saved Help a. A new operating system for an existing machine is expected to cost $590,000 and have a useful life of six years. The system yields an incremental after-tax income of $230,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $22,800. b. A machine costs $500,000, has a $37,100 salvage value, is expected to last eight years, and will generate an after-tax income of $60,000 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 machine costs $500.000, has a $37,100 salvage value, is expected to last eight years, and will generate an after-tax Income of $60,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar) Select Chart PV Factor - Present Value Cash Flow Annual cash flow Residual value Net present value
