1. A new operating system for an existing machine is expected to cost $792,000 and have a useful life of six years. The system yields an incremental after-tax income of $210,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $24,000.
2. A machine costs $500,000, has a $31,100 salvage value, is expected to last eight years, and will generate an after-tax income of $80,000 per year after straight-line depreciation.

Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1,FV of $1,PVA of $1andFVA of $1)(Use appropriate factor(s) from the tables provided.)