1. A new operating system for an existing machine is expected to cost $752,000 and have a useful life of six years. The system yields an incremental after-tax income of $220,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $80,000.
2. A machine costs $520,000, has a $48,000 salvage value, is expected to last eight years, and will generate an after-tax income of $130,000 per year after straight-line depreciation.

Assume the company requires a12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1,FV of $1,PVA of $1, andFVA 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 $752,000 and have a useful life of six years. The system yields an incremental after-tax income of $220,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $80,000. (Round your answers to the nearest whole dollar.) Annual cash flow 'resent Value of an Annuity of 1 $ 332 000 :esent Value of 1 $ 80 000 i 0. 5066 Present value of cash inows Immediate cash outows Net present value Required B > || 4:. D m N 00 Residual value Complete this question by entering your answers in the tabs below. Required A Required B || 6) 0 Annual cash flow ' resent Value of an Annuity of 1 $ 189,000 \"- - resent Value of 1 $ 48,000 0.4039 Present value of cash inows Immediate cash outows Net present value