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a. A new operating system for an existing machine is expected to cost $786,000 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 $786,000 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 $90,000 b. A machine costs $540,000, has a $52,000 salvage value, is expected to last eight years, and will generate an after-tax income of $140,000 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 A new operating system for an existing machine is expected to cost $786,000 and have a useful life of six years. The system Vields an incremental after-tax income of $230,000 each year after deducting its straight line depreciation. The predicted salvage value of the system is $90,000. (Round your answers to the nearest whole dollar) Cash Flow Select Chart Amount X PV Factor Present Value Annual cash flow Resad value Not present value Complete this question by entering your answers in the tabs below. Required A Required B A machine costs $540,000, has a $52,000 salvage value, is expected to last eight years, and will generate an after-tax income of $140,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar) Cash Flow Select Chart Amount * PV Factor Present Value Annual cash flow Residual value Not present value

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