A new operating system for an existing machine is expected to cost $640,000 and have a useful life of six years. The system yields an incremental after-tax income of $175,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $13,000.

A machine costs $560,000, has a $25,400 salvage value, is expected to last eight years, and will generate an after-tax income of $80,000 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.)

A new operating system for an existing machine is expected to cost $640,000 and have a useful life of six years. The system yields an incremental after-tax income of $175,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $13,000. (Round your answers to the nearest whole dollar.) Cash Flow Annual cash flow Residual value Select Chart Amount x PV Factor Present Value Net present value A machine costs $560,000, has a $25,400 salvage value, is expected to last eight years, and will generate an after-tax income of $80,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Cash Flow Annual cash flow Residual value Select Chart AmountPV Factor Present Value Net present value