1) Incremental Revenues: additional units sold x price = 50,000 * $260 = $13,000,000 2) Incremental Costs: additional units sold x production costs = 50,000 * $110 = $5,500,000 3) Depreciation: Depreciable base/Depreciable life = $7,500,000 /5 = $1,500,000 4) Marginal Tax Rate: 40% YEAR 2 3 4 in Revenues 13.000 13,000 13,000 13,000 Cost of Goods -5,500 -5,500 -5.500 -5,500 Sold Gross Profit 7.500 7,500 7,500 7.500 (R + C) Selling General, -2,800 -2.800 -2,800 -2,800 0 Administrative Depreciation -1,500 -1,500 -1,500 -1,500 -1,500