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a. A new operating system for an existing machine is expected to cost $630,000 and have a useful life of six years. The system yields

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a. A new operating system for an existing machine is expected to cost $630,000 and have a useful life of six years. The system yields an incremental after-tax income of $160,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $25,400. b. A machine costs $580,000, has a $39,500 salvage value is expected to last eight years, and will generate an after-tax income of $76,000 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 S1, 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 $580,000, has a $39,500 salvage value is expected to last eight years, and will generate an after-tax income of $75,000 year after straight-line depreciation (Round your answers to the nearest whole dollar) Select Chart Cash Flow Annual cash flow Residual value Amount * PV Factor Present Value 5 0 o Net present value the system is $25,400. b. A machine costs $580,000 has a $39,500 salvage value is expected to last eight years, and will generate an after-tax income of $76,000 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 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 $580,000, has a $39,500 salvage value is expected to last eight years, and will generate an after-tax income of $76,000 per year after straight-line depreciation (Round your answers to the nearest whole dollar) Cash Flow Select Chart Amount x PV Factor Present Value Annual cash flow 0 Residual value O Net present Value

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