Exercise 24-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $740,000 and have a useful life of six years. The system yields an incremental after-tax income of $230,000 each year after deducting its straight-line depreciation. The predicted salvage value of b. A machine costs $490,000, has a $22.700 salvage value, is expected to last eight years, and will generate an after-tax income of $88,000 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 $740,000 and have a useful life of six years. The system yields an incremental after-tax income of $230,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $28,200. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount * PV Factor = Present Value Annual cash flow Residual value Net present value Requr Required B > Complete this question by entering your answers in the tabs below. Required A Required B A machine costs $490,000, has a $22,700 salvage value, is expected to last eight years, and will generate an after-tax income of $88,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount * PV Factor Annual cash flow Residual value Present Value Net present value