o. A new operating system for an existing machine is expected to cost $667000 and...

70.2K

Verified Solution

Question

Accounting

image
image
image
image
o. A new operating system for an existing machine is expected to cost $667000 and have a useful life of six years. The system yields an incremental after-tax income of $195,000 each year after deducting its straightline depreciation. The predicted salvage value of the system is $55,000 b. A machine costs 5470.000, has a $38,000 salvage value, is expected to last eight years, and will generate an after-tax income of $105.000 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. EV_OCSI, PVA of S1, and EVA [ 5.1) (Use appropriate factor(s) from the tables provided.) Complete this question by entering your answers in the tabs below. Required A Required B A new operating system for an existing machine is expected to cost $067,000 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 $55,000. (Round your answers to the nearest whole dotar.) Select Chart Amount Cash Flow Annual cash flow Residual value PV Factor - Present Value S 0 0 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 Si. PVA of S1, and FVA OLS! (Use appropriate factor(s) 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 machine is expected to cost $667,000 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 $55,000. (Round your answers to the nearest whole dollar) Select Chart Amount PV Factor Present Value Annual cash flow Cash Flow 0 0 Residual value Net present value Required 8 > 5105,000 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 inve (PV of $1. FV of $1. PVA of S1, and EVA 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 $470,000, has a $38,000 salvage value, is expected to last eight years, and will generate an after-tax income of $105,000 per year after straight-line depreciation (Round your answers to the nearest whole dollar) Select Chort Amount X PV Factor Cash Flow Annual cash flow Residual value Present Value 0 0 Net present value A machine costs $400,000 and is expected to yield an after-tax net income of $9,000 each year. Management predicts this machine has a 10-year service life and a $80,000 salvage value, and it uses straight-line depreciation Compute this machine's accounting rate of return Accounting Rate of Return Choose Denominator Choose Numerator: Accounting Rate of Return Accounting rate of return

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students