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 $503,000 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 $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Expected annual sales of new product	$	1,890,000
Expected annual costs of new product
Direct materials		455,000
Direct labor		670,000
Overhead (excluding straight-line depreciation on new machine)		335,000
Selling and administrative expenses		155,000
Income taxes		36	%

Required:

1.

Compute straight-line depreciation for each year of this new machines life.

Straight-line depreciation

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

Answer is not complete

Expected Net Income
Revenues
Expenses
		0
Expected Net Cash Flow
0