Answered step by step
Verified Expert Solution
Question
1 Approved Answer
last 2 pics showing the options on the boxes a. A new operating system for an existing machine is expected to cost $660,000 and have
last 2 pics showing the options on the boxes
a. A new operating system for an existing machine is expected to cost $660,000 and have a useful life of six years. The system yields an incremental after-tax income of $155,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $26.800. b. A machine costs $410,000, has a $34.100 salvage value, is expected to last eight years, and will generate an after-tax income of $90,000 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. 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 $660,000 and have a useful life of six years. The system yields an incremental after-tax income of $155,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $26,800. (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 Required Required B > a. A new operating system for an existing machine is expected to cost $660,000 and have a useful life of six years. The system yields an incremental after-tax income of $155,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $26.800. b. A machine costs $410,000, has a $34.100 salvage value, is expected to last eight years, and will generate an after-tax income of $90,000 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. 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 A machine costs $410,000, has a $34,100 salvage value, is expected to last eight years, and will generate an after-tax income of $90,000 per year after straight-line depreciation. (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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started