Exercise 24-6 Net present value LO P3
| Compute the net present value of each potential investment: |
| Assume the company requires a 10% rate of return on its investments. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) |
| a. |
A
new operating system for an existing machine is expected to cost
$520,000 and have a useful life of six years. The system yields an
incremental after-tax income of $150,000 each year after deducting its
straight-line depreciation. The predicted salvage value of the system is
$10,000. (Round your answer to the nearest whole dollar.)
 |
No comments:
Post a Comment