7. 13.19 Estimate the gross income for Bling Enterprises, which reports a CFAT of $2.5 million, $900,000 in expenses, $900,000 in depreciation charges, and has an effective tax rate of 26.4%.

8. 13.20 Advanced Anatomists, Inc., researchers in medical science, is contemplating a commercial venture concentrating on proteins based on the new X-ray technology of free-electron lasers. To recover the huge investment needed, an annual $2.5 million CFAT is needed. The federal tax rate is 21%. However, state taxing authorities will levy an 8% tax on TI. Over a 3-year period, the deductible expenses and depreciation are estimated to total $1.3 million the first year, increasing by $500,000 per year thereafter. Of this, 50% is expenses and 50% is depreciation. Help the CFO estimate the required gross income for each year.