a. A new operating system for an existing machine is expected to cost $701,000 and have a useful life of six years. The system yields an incremental after-tax income of $205,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $65,000. b. A machine costs $490,000, has a $42,000 salvage value, is expected to last eight years, and will generate an after-tax income of $115,000 per year after straight-line depreciation. Assume the company requires a 13% 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 $701,000 and have a useful life of six years. The system yields an incremental after-tax income of $205,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $65,000. (Round your answers to the nearest whole dollar.) Amount Cash Flow Annual cash flow Residual value x PV Factor - Present Value $ 0 0 Select Chart Present Value of an Annuity of 1 Present Value of 1 Present value of cash inflows Immediate cash outflows Net present value Required Required B a. A new operating system for an existing machine is expected to cost $701,000 and have a useful life of six years. The system yields an incremental after-tax income of $205,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $65,000. b. A machine costs $490,000, has a $42,000 salvage value, is expected to last eight years, and will generate an after-tax income of $115,000 per year after straight-line depreciation. Assume the company requires a 13% 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 es A machine costs $490,000, has a $42,000 salvage value, is expected to last eight years, and will generate an after-tax Income of $115,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Select Chart Amount x PV Factor - Present Value $ 0 Cash Flow Annual cash flow Residual value 0 Net present value