Answered step by step
Verified Expert Solution
Question
1 Approved Answer
can you explain gow to calculate each step, including the pv factor without using the table Exercise 24-6 Net present value LO P3 a. A
can you explain gow to calculate each step, including the pv factor without using the table
Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $633,000 and have a useful life of six years. The system yields an incremental after-tax income of $185,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $45,000. b. A machine costs $450,000. has a $34.000 salvage value, is expected to last eight years, and will generate an after-tax income of $95,000 per year after straight-line depreciation Assume the company requires a 13% rate of return on its Investments. Compute the net present value of each potential investment py of $1. FV of S1, PVA O S1, 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 neve operating system for an existing machine is expected to cost $633,000 and have a useful life of six years. The system yields an incremental after-tax income of $185.000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $45.000. (Round your answers to the nearest whole dolas) Cash Flow Annual cash flow Residual value PV Factor Present Value Select Chart Present Value of an Annuyot Present Value Amount 3.283.000 345.000 Matrosert Rede Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $633,000 and have a useful life of six years. The system yields an incremental after-tax income of $185.000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $45.000 b. A machine costs $450.000, has a $34.000 salvage value. is expected to last eight years, and will generate an after-tax income of $95.000 per year after straight-line depreciation. Assume the company requires a 13% rate of return on its investments. Compute the net present value of each potential investment (PV of $1. FV of S1. PVA of S1 and FVA 0f $13) (Use appropriate factor(a) from the tables provided.) Complete this question by entering your answers in the tabs below. Required A Required B A machine costs $450.000, has a $34.000 salvage value is expected to last eight years, and will generate an after-tax income of 595,000 per year after straight-line depreciation (Round your answers to the nearest whole dollar) Cash Flow Select Chart Amount * PV Factor - Present Value Annual cashow Resolve Net presenta Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started