Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a. A new operating system for an existing machine is expected to cost $752,000 and have a useful life of six years. The system yields

image text in transcribed
image text in transcribed
a. A new operating system for an existing machine is expected to cost $752,000 and have a useful life of six years. The system yields an incremental after-tax income of $220,000 each year after deducting its straight line depreciation. The predicted salvage value of the system is $80,000 b. A machine costs $520,000, has a $48.000 salvage value is expected to tast eight years, and will generate an after-tax income of $130,000 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 (PVOL$1. EV SI. PVA OLS1, and EVA 1 S1) (Use appropriate foctoris) 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 $752,000 and have a useful life of six years. The system yields an incremental after-tax income of $220,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $80,000. (Round your answers to the nearest whole dollar) Select Chart Amount * PV Factor - Present Value Cash Flow Annual cash flow Residual value Net present value Required Required) o. A new operating system for an existing machine is expected to cost $752.000 and have a useful life of six years. The system yields an incremental after-tax income of $220,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $80,000 b. A machine costs $520,000, has a $48.000 salvage value, is expected to last eight years, and will generate an after-tax income of $130,000 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. EVOSI. PVA of S1, and EVA of $1) (Use oppropriate foctor(s) from the tables provided.) Complete this question by entering your answers in the tabs below. Required A Required B A machine costs $520,000, has a 548,000 salvage value is expected to last eight years, and will generate an alter-tax Income of $130,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar) Select Chart Amount X PV Factor Present Value Cash Flow Annual cash flow Residual value Not present value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Managerial Accounting

Authors: Peter Brewer, Ray Garrison, Eric Noreen

9th Edition

1265672008, 978-1265672003

More Books

Students also viewed these Accounting questions

Question

What are the objectives of job evaluation ?

Answered: 1 week ago

Question

Write a note on job design.

Answered: 1 week ago

Question

Compute the derivative of f(x)cos(-4/5x)

Answered: 1 week ago

Question

Discuss the process involved in selection.

Answered: 1 week ago

Question

Why is interest in portable benefits in health care increasing?

Answered: 1 week ago