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  3. a. a new operating system for an existing machine

a. A new operating system for an existing machine is expected to cost $580,000 and...

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Accounting

a. A new operating system for an existing machine is expected to cost $580,000 and have a useful life of six years. The system yields an incremental after-tax income of $175,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $19,600. (Round your answers to the nearest whole dollar.)

Cash Flow Select Chart Amount x PV Factor = Present Value
Annual cash flow = $0
Residual value = 0
Net present value

b. A machine costs $430,000, has a $27,800 salvage value, is expected to last eight years, and will generate an after-tax income of $78,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.)

Cash Flow Select Chart Amount x PV Factor = Present Value
Annual cash flow = $0
Residual value = 0
Net present value

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