The TechNet Company produces and sells 6,800 modular computer desks per year at a selling price of$400 each. Its current production equipment, purchased for $1,950,000 and with a 5-year useful life, is only 2 years old. It has a terminal disposal value of $0 and is depreciated on a straight-line basis. The equipment has a current disposal price of $400,000.However, the emergence of a new molding technology has led TechNet to consider either upgrading or replacing the production equipment. The following table presents data for the two alternatives:

A	B	C
1		Upgrade	Replace
2	One-time equipment costs	$3,000,000	$4,600,000
3	Variable manufacturing cost per desk	$165	$70
4	Remaining useful life of equipment (in years)	3	3
5	Terminal disposal value of equipment	$0	$0

All equipment costs will continue to be depreciated on a straight-line basis. For simplicity, ignore income taxes and the time value of money.

Requirement 4. Assume that all data are as given in the original exercise. Dan Doria is TechNet's manager, and his bonus is based on operating income. Because he is likely to relocate after about a year, his current bonus is his primary concern. Which alternative would Doria choose? Explain.

Begin by calculating the operating income under each alternative. (If an input field is not used in the table, leave the input field empty; do not enter a zero. Round all amounts to the nearest whole number.)

	Over 1 Year
	Upgrade	Replace
Revenues	2720000	2720000
Cash operating costs	1122000	476000
Depreciation	1512000	1533333
Loss on disposal of old equipment		780000
Total costs	2634000	2789333
Operating income	86000	69333

Please help, I keep getting part 4 wrong. I dont know where???? Please submit your own work, i looked at the example i still dont understand.