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 $$515,000$ cost with an expected four$-$year life and a $$20,000$ salvage value. Additional annual information for this new product line follows. $($PV of $$1,$ FV of $$1,$ PVA of $$1,$ and FVA of $$1)$

Note: Use appropriate factor$($s$)$ from the tables provided.

Sales of new product $ $1,990,000$

Expenses

Materials, labor, and overhead $($except depreciation$)1,487,000$

Depreciation$$Machinery $123,750$

Selling, general, and administrative expenses $178,000$

Required:

Determine income and net cash flow for each year of this machine$$s life.

Compute this machine$$s payback period, assuming that cash flows occur evenly throughout each year.

Compute net present value for this machine using a discount rate of $7\%.$