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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
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.) Answer is complete but not entirely correct. 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.) Cash Flow Select Chart Amount $ Annual cash flow Residual value PV Factor 4.3552= 0.5644 = 332,000 80,000 $ X Present Value of an Annuity of 1 Present Value of 1 Present value of cash inflows Immediate cash outflows Net present value Present Value $ 1,445,926 45,152 $ 1,491,078 (752,000) $ 653,513 X
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