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Exercise 25-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $630,000 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 o the system is $18,600. b. A machine costs $390,000, has a $24,800 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 10% rate of return on its investments. Compute the net present value of each potential investment. 1) (Use appropriate factor(s) from the tables provided.) Complete this question by entering your answers in the tabs below. A new operating system for an existing machine is expected to cost $630,000 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 $18,600. (Round your answers to the nearest whole dollar.) ect Chart 321,900 x t Value of an Annuity of 1 18,600x Value of 1 Immediate cash outflows 630,000 Net present value Exercise 25-6 Net present value LO P3 a. A new operating system for an existing machine is expected to cost $630,000 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 $18,600 b. A machine costs $390,000, has a $24,800 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 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 $390,000, has a $24,800 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.) Amount nt Value Residual value Net