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A new operating system for an existing machine is expected to cost $540,000 and have a useful le of six years. The system yields an

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A new operating system for an existing machine is expected to cost $540,000 and have a useful le 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 $20.000 b. A machine costs $400.000, has a $28.400 salvage value, is expected to last eight years, and will generate an atter tax income of $80.000 per year her straight-line depreciation Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment ex 51. EYES EYALL and EVA 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 $540,000 and have a useful life of 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 $20,000. (Round your answers to the nearest whole dollar.) Amount Cash Flow Annual cash flow Residual value Select Chart Present Value of an Annuity of 1 Present Value of 1 Present value of cash inflows Immediate cash outflows Net present value * PV Factor - 4.3553 - 0.5645 - Present Value 5 11.200 $ 20,000 (540,000 Required Required A Required B A machine costs $400,000, has a $28,400 salvage value, is expected to last eight years, and will generate an after-tax Income of $60,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Amount x Cash Flow Annual cash flow Residual PV Factor - 5.3349 = 0.4865- Present Value 0 13249 S 28.400 X Select Chart Present Value of an Annuity of 1 Present Value of 1 Present value of cash inflows Immediate cash outflows Net present value (400,000)

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