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Exercise 25-6 Net present value LO P3 a. A new operating system for an existing...

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Accounting

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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 $650,000 and have a useful life of six years. The system yields an incremental after-tax income of $300,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $17.400. b. A machine costs $520,000, has a $33,500 salvage value is expected to last eight years, and will generate an after-tax income of $90,000 per year after straight-line depreciation 203:42 Assume the company requires a 10% rate of retum on its investments Compute the net present value of each potential investment. PV of St. Vor $. PVA Si and EVA of $ (Use appropriate factors) 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 mach ne is expected to cost 5650.000 and have a useful life of six yearThe system Vields an incremental after-tax income of $300,000 each year after deducting its straight-line depreciation. The predicted Salvage value of the system is 517.400. Round your answer to the nearest wole dollar Cash Flow Select Chart Amount X PV Factor

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