The Rustic Welt Company is proposing to replace its old welt-making machinery with more modern equipment. The new equipment costs $9.9 million (the existing equipment has zero salvage value). The attraction of the new machinery is that it is expected to cut manufacturing costs from their current level of $8 a welt to $3.2. However, as the following table shows, there is some uncertainty both about future sales and about the performance of the new machinery:

	Pessimistic	Expected	Optimistic
Sales, millions of welts	2.3	2.4	2.6
Manufacturing cost with new machinery, dollars per welt	7.9	3.2	4.9
Economic life of new machinery, years	5	8	11

Calculate the annual cost savings. Assume a discount rate of 10%. Rustic Welt does not pay taxes. (Do not round intermediate calculations. Round "PV Factor" to 4 decimal places and the final answer to 2 decimal places.)

Annual cost savings

$