| Scooter company is planning to add a new product to its line. There are two choices. To manufacture product SB1, the company needs to buy a new machine at a $519,000 cost with an expected four-year life and a $15,000 salvage value. All sales are for cash, and all cost are out-of-pocket, except for depreciation on the new machine. Additional information includes: Expected annual sales of new product Expected annual costs of new product Direct materials Direct labor Overhead (excluding straight-line depreciation on new machine) Selling and administrative expenses Income taxes $1,960,000 460,000 678,000 338,000 173,000 30%