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a. A new operating system for an existing machine is expected to cost $650,000 and have a useful life of six years. The system yields
a. A new operating system for an existing machine is expected to cost $650,000 and have a useful life of six years. The system yields an incremental after-tax income of $190,000 each year after deducting its straight-line depreciation The predicted salvage value of the system is $50,000 b. A machine costs $460.000. has a $36,000 salvage value, is expected to last eight years, and will generate an after-tax income of $100.000 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 $650,000 and have a useful life of six years. The system yields an incremental after-tax income of $190,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $50,000. (Round your answers to the nearest whole dollar) Select Chart Amount x PV Factor Present Value Cash Flow Annual cash flow Residual value Net present value Required B > a. A new operating system for an existing machine is expected to cost $650,000 and have a useful life of six years. The system yields an incremental after-tax income of $190,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $50,000. b. A machine costs $460,000, has a $36,000 salvage value, is expected to last eight years, and will generate an after-tax income of $100,000 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 Required B A machine costs $460,000, has a $36,000 salvage value, is expected to last eight years, and will generate an after-tax income of $100,000 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 Residual value Net present value
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