Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $680,000 and have a useful life of six years. The system yields an incremental after-tax income of $165,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $22,000. b. A machine costs $440,000, has a $29,000 salvage value, is expected to last eight years, and will generate an after-tax income of $62,000 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 of $1, FV of $1, PVA of $1, 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 new operating system for an existing machine is expected to cost $680,000 and have a useful life of six years. The system yields an incremental after-tax income of $165,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $22,000. (Round your answers to the nearest whole dollar.) Cash Flow Annual cash flow Residual value Select Chart Amount x PV FactorPresent Value 0 Net present value Required A Required B Required A Required B A machine costs $440,000, has a $29,000 salvage value, is expected to last eight years, and will generate an after-tax income of $62,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Cash Flow Annual cash flovw Residual value Select Chart Amount x PV FactorPresent Value 0 Net present value