a. A new operating system for an existing machine is expected to cost $660,000 and have a useful life of six years. The system yields an incremental after-tax income of $170,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $12,000. b. A machine costs $570,000, has a $23,600 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 12% 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.) 2.29 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 $660,000 and have a useful life of six years. The system yields an incremental after-tax income of $170,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $12,000. (Round your answers to the nearest whole dollar) Cash Flow Select Chart Amount PV Factor Present Value Annual cash flow Future Value of an Annuity of 1 Residual value X machine Destito cost 70.000 dibanotimmar Thrustminden incremental e to search o RE a. A new operating system for an existing machine is expected to cost $660,000 and have a useful life of si The system yields an incremental after-tax income of $170,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $12,000. b. A machine costs $570,000, has a $23,600 salvage value, is expected to last eight years, and will generat tax income of $68,000 per year after straight-line depreciation. Assume the company requires a 12% rate of retum on its investments. Compute the net present value of eac investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1 (Use appropriate factor(s) from the tables provide Complete this question by entering your answers in the tabs below. Required B Required A Required B A machine costs $570,000, has a $23,600 salvage value, is expected to last eight years, and will generate an af income of $68,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount X PV Factor Annual cash flow Residual value Present Value $ 0 Net present value Prev 5 of 37 Next >
