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 $511,000 cost with an expected four-year life and a $19,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (FV of $1,PV of $1,FVA of $1andPVA of $1)(Use appropriate factor(s) from the tables provided.)

Expected annual sales of new product$1,940,000Expected annual costs of new productDirect materials500,000Direct labor674,000Overhead (excluding straight-line depreciation on new machine)336,000Selling and administrative expenses177,000Income taxes30%