Exercise 11-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $520,000 and have a useful life of six years. The system yields an incremental after-tax income of $150,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. b. A machine costs $380,000, has a $20,000 salvage value, is expected to last eight years, and will generate an after-tax income of $60,000 per year after straight-line depreciation Assume the company requires a 10% rate of return on its Investments. Compute the net present value of each potential Investment. (PV of $1. Ev of $1. PVA of S1, and FVA 0f $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 $520,000 and have a useful life of six years. The system yields an incremental after-tax income of $150,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. (Round your answers to the nearest whole dollar) Select Chart Amount X PV Factor Present Value Cash Flow Annual cash flow Residual value Net present value Required > Exercise 11-6 Net present value LO P3 2 points a. A new operating system for an existing machine is expected to cost $520,000 and have a useful life of six years. The system yields an incremental after-tax income of $150,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000 b. A machine costs $380,000, has a $20,000 salvage value is expected to last eight years, and will generate an after-tax Income of $60,000 per year after straight-line depreciation B00 Assume the company requires a 10% rate of return on its investments Compute the net present value of each potential investment. PV ot$1. FV of S1. PVA of $1, and FVA of $11 (Use appropriate factor(s) from the tables provided) HI Complete this question by entering your answers in the tabs below. Print Required A Required B rences A machine costs $380,000. Tas a $20,000 salvage value is expected to last eight years, and will generate an atter-tax income of $60,000 per year after straight-line depreciation (Round your answers to the nearest whole dollar) Select Chart Amount . PV Factor Present Value Cash Flow Annual cash flow Res dual value Net present value Required A