1. A new operating system for an existing machine is expected to cost $660,000 and have a useful life of six years. The system yields an incremental after-tax income of $245,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $28,600.
2. A machine costs $400,000, has a $35,000 salvage value, is expected to last eight years, and will generate an after-tax income of $68,000 per year after straight-line depreciation.

Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) I am stuck on the part that is circled in RED what am I doing wrong.

A new operating system for an existing machine is expected to cost $660,000 and have a useful life of six years. The syster yields an incremental after-tax income of $245,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $28,600. (Round your answers to the nearest whole dollar.) Present Value Cash Flow Select Chart ount XFactor Annual cash Present Value of an Annuity of S371,280 x X 3.6048 xS 1,338,390 16,228 $ 1,354 618 Residual value 28,600X 0.5674 X Present value of cash inflows Immediate cash outflows Net present value 660,000) $ 694,618 Required A Required B>