Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $599,000 and have a useful life of six years. The system yields an incremental after-tax income of $175,000 each year after deducting its straight line depreciation. The predicted salvage value of the system is $35,000. b. A machine costs $430,000, has a $30,000 salvage value, is expected to last eight years, and will generate an after-tax income of $85,000 per year after straight-line depreciation. Assume the company requires a 11% 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 $599,000 and have a useful life of six years. The system yields an incremental after-tax income of $175,000 each year after deducting its straight line depreciation. The predicted salvage value of the system is $35,000. (Round your answers to the nearest whole dollar) x PV Factor - Present Value Cash Flow Annual cash flow Residual value Select Chart Amount present Value of an Annuity of 1 wwwmmmL Not present value Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $599,000 and have a useful life of six years. The system yields an incremental after-tax income of $175,000 each year after deducting its straight line depreciation. The predicted salvage value of the system is $35,000. b. A machine costs $430,000, has a $30,000 salvage value, is expected to last eight years, and will generate an after-tax income of $85,000 per year after straight-line depreciation. Assume the company requires a 11% 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 51) (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 $430,000, has a $30,000 salvage value, is expected to last laht years, and will generate an after tax income 83,000. PAYSararter.straight line depredation. Round your answers to th e whole della Cash Flow Select Chart Amount * PV Factor - Present Value Annual cash flow Residual value Net present value Required A Required >
