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a. A new operating system for an existing machine is expected to cost $790,000 and have a useful life of six years. The system ylelds

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a. A new operating system for an existing machine is expected to cost $790,000 and have a useful life of six years. The system ylelds an incremental after-tax income of $200,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000 b. A machine costs $410,000, has a $32,000 salvage value, is expected to last eight years, and will generate an after-tax income of $64,000 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 $790,000 and have a useful life of six years. The system yields an incremental after-tax income of $200,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. (Round your answers to the nearest whole dollar) Amount X PV Factor Select Chart Cash Flow Annual cash flow Residual value Present Value $ 0 0 Net present value

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