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 $580,000 cost with an expected four-year life and a $60,000 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. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Expected annual sales of new product $ 2,040,000

Expected annual costs of new product Direct materials 580,000

Direct labor 692,000 Overhead excluding straight-line depreciation on new machine

356,000 Selling and administrative expenses

180,000 Income taxes 30 %

2. Determine expected net income and net cash flow for each year of this machine