A new operating system for an existing machine is expected to cost $565,000 and have a useful life of six years. The system yields an incremental after-tax income of $165,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $25,000. A machine costs $410,000, has a $26,000 salvage value, is expected to last eight years, and will generate an after-tax income of $75,000 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 $565,000 and have a useful life of six years. The system yields an incremental after-tax income of $165,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $25,000. (Round your answers to the nearest whole dollar.) PV Cash Flow Annual cash flow Residual value Amount 255,000 25,000 x Factor 3.9980 % 0.4803 X = Select Chart Present Value of 1 $ Future Value of 1 X $ Present value of cash inflows Immediate cash outflows Net present value Present Value $ 1,019,490 12,008 $ 1,031,498 (565,000) $ 466,498 Required A Required B > Required A Required B A machine costs $410,000, has a $26,000 salvage value, is expected to last eight years, and will generate an after-tax incom of $75,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Select Chart Amount PV Factor Present Value Cash Flow Annual cash flow Residual value = $ 0 0 Net present value