1. Planet Enterprises is purchasing a $10.2 million machine. It will cost $51 000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.1 million per year along with incremental costs of $1.3 million per year. Planet's marginal tax rate is 30%. You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free cash flows associated with the new machine?

2.You purchased a machine for $1.07 million three years ago and have been applying straight-line depreciation to zero for aseven-year life. Your tax rate is 40%. If you sell the machine right now (after three years of depreciation) for $746 000, what is your incremental cash flow from selling the machine?