A new operating system for an existing machine is expected to
cost $680,000 and have a useful life of six years. The system
yields an incremental after-tax income of $255,000 each year after
deducting its straight-line depreciation. The predicted salvage
value of the system is $20,400.
A machine costs $380,000, has a $33,800 salvage value, is
expected to last eight years, and will generate an after-tax income
of $66,000 per year after straight-line depreciation.A new
operating system for an existing...