Factor company is planning to add a new product to its line. to manufacture this product, the company needs to buy a new machine at a 480,000 cost with an expected four- year life and a $20,000 salvage value. All sales are for cash, and all costs are out of pocket expect for depreciation on the new machine. Additional information includes the following.

expected annual sales of new product $1,840,000

expected annual cost of new product

direct materials $480,000

direct labor $672,000

overhead exculding straight line depreciation on the new machine. $336,000

selling and administrative expenses $160,000

Income taxes 30%

Require.

- Compute the net present value for this machine using a discount rate of 7% and assuming that cash flows occur at each year-end. (hint: salvage value is a cash inflowat the end of the asset's life. ROund the net present value to the nearest dollar.)