Compute the net present value of each potential investment. Assume the company requires a 10% rate of return on its investments. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

a. A new operating system for an existing machine is expected to cost $780,000 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 $26,800 Answer is not complete. Cash Flow Annual cash flovw Residual value Select Chart Present Value of 1 Future Value of 1 Amount PV Factor Present Value Immediate cash outflows Present value of cash inflows Net present value b. A machine costs $420,000, has a $31,100 salvage value, is expected to last eight years, and will generate an after-tax income of $84,000 per year after straight-line depreciation Answer is not complete. PV Factor Cash Flow Annual cash flow Residual value Select Chart Future Value of an Annuity of 1 Present Value of an Annuity of 1 Amount Present Value 0 Immediate cash outflows Present value of cash inflows Net present value