Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $820,000 and have a useful life of six years. The system yields an incremental after-tax income of $240,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $100,000 b. A machine costs $560,000, has a $56,000 salvage value is expected to last eight years, and will generate an after-tax income of $150,000 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 DESI. EVOLS, EVA OLS1, and EVA OLS1) (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 $820,000 and have a useful life of six years. The system yields an incremental after-tax income of $240,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $100,000. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount x PV Factor = Present Value Annual cash flow Residual value Net present value Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $820,000 and have a useful life of six years. The system yields an incremental after-tax income of $240,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $100,000 b. A machine costs $560,000, has a $56,000 salvage value, is expected to last eight years, and will generate an after-tax income of $150,000 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 (PVOL 51, EVO 51. PVA OLS1, and EVA OD 5.1) (Use appropriate factor(s) from the tables provided.) Complete this question by entering your answers in the tabs below. Required A Required B A machine costs $560,000, has a $56,000 salvage value, is expected to last eight years, and will generate an alter-tax Income of $150,000 per year after straight-line depreciation (Round your answers to the nearest whole dollar) Amount X PV Factor Present Value Cash Flow Annual cash flow Readual value Select Chart Present Value of an Annuity of 1 Net present Value