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Please answer this question clearly a. A new operating system for an existing machine is expected to cost $752,000 and have a useful life of
Please answer this question clearly
a. A new operating system for an existing machine is expected to cost $752,000 and have a useful life of six years. The system yields an incremental after-tax income of $220,000 each year after deducting its straight- line depreciation. The predicted salvage value of the system is $80,000 b. A machine costs $520,000, has a $48.000 salvage value, is expected to last eight years, and will generate an after-tax income of $130,000 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 Required B A new operating system for an existing machine is expected to cost $752,000 and have a useful life of six years. The 5) yields an incremental after-tax income of $220,000 each year after deducting its straight-line depreciation. The predicti salvage value of the system is $80,000. (Round your answers to the nearest whole dollar) Select Chart Amount Cash Flow Annual cash flow Residual value * PV Factor - Present Value Net present value Required > a. A new operating system for an existing machine is expected to cost $752,000 and have a useful life of six years. The system yields an incremental after-tax income of $220,000 each year after deducting its straight- line depreciation. The predicted salvage value of the system is $80,000. b. A machine costs $520,000, has a $48,000 salvage value, is expected to last eight years, and will generate an after-tax income of $130,000 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 machine costs $520,000, has a $48,000 salvage value, is expected to last eight years, and will generate an after-tax of $130,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.) Cash Flow Select Chart Amount * PV Factor Prosent Value Annual cash flow Residual value Net present value Step by Step Solution
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