14.

After paying $10 miltion for a feasibility study, Long-life Ltd launched an ambitious plan and wrote a proposal with the following cash flow estimates for a 50 -year capital project. Equipment cost: $100 miltion, Shipping costs: $40 malion, Installition: $10 million, Salvage: $10 million, Working capital investment: $2 million, Revenues are expected to increase by $20 million per year and cash operating expenses by $15 million per year. The firm's marginal tax rate is 20 percent, its weighted average cost of capital is 10%, and the firm requires a 5 -year payback Assurning conventional straight-line depreciation, calculate the annual depreciation expense for this project. $2.4 million 530 intion None of the listed choices is comect $2.08 million