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. (Round your answers to the nearest whole dollar.)

Cash Flow	Select Chart	Amount	x	PV Factor	=	Present Value
Annual cash flow		$680,000	x	1.0000	=	$680,000
Residual value	Present Value of 1	$255,000	x	0.9091	=	231,821
	Net present value					$911,821
	Present value of cash inflows					680,000
	Net present value

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. (Round your answers to the nearest whole dollar.)

Cash Flow	Select Chart	Amount	x	PV Factor	=	Present Value
Annual cash flow	Present Value of 1	$380,000	x	1.0000	=	$380,000
Residual value					=	0
	Net present value