a. A new operating system for an existing machine is expected to cost $770,000 and have a useful life of six years. The system yields an incremental after-tax income of $245,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $25,400 b. A machine costs $520,000, has a $28,400 salvage value, is expected to last eight years, and will generate an after-tax income of $68,000 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 $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 $770,000 and have a useful life of six years. The system yields an incremental after-tax income of $245,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $25,400. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount X PV Factor Present Value Annual cash flow 245,000 x 4.3540 - $ 1,066,730 Residual value $ 25,400 x 0.56401 - 14.326 $ 1,081,056 $ Net present value $ 1,081,056 Raed A Required B >