A machine costs $540,000, has a $33,800 salvage value, is expected to last eight years, and will generate an after-tax income of $80,000 per year after straight-line depreciation.

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 $195,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $18,600.
A net operating system for an existing machine is expected to cost $660 0DO and have a useful life of sixyears . The system yields an incremental after tax income of 5 195 , 100 each year after deducting itsstraight line depreciation The predicted sale agevalue of the system i S18 500 .A machine costs $6 40 100 , has a $3 600 sal arevalue is expected to last eight years , and will generateGeneral" after tax income of 590 Coo per year after straight line depreciationAssume the company regpany requires a 120% rate of return on its investments . Cments . Compute the net presentvalue of each potential investment . IFVorst , FVofST FVorst PVAOfST and EVARIST The appropriatefactor ( s ) from the tables providerComplete this question by entering your answers in the tabs belowComplete this question b" by entering your answers in the tabs belowRequired ARequired Bnew operatingperating system for an existing machine is expected to cost $650 090 and have auseful life of six years . The system yields an incremental after – tax income of $ 195 090 eatyear after deducting its straight – line depreciation . The predicted salvage value of the systemLIFTINGis $18 500 . I Roundour answers to the nearest whole dollar . )-Cash FlowSelect ChartAmoun* / PV FactorPresenValueAnnual cashResidual valueNet present value

 

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