6-2

Daily Enterprises is purchasing a $10.2 million machine. It will cost $53,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. The machine will generate incremental revenues of $4.3 million per year along with incremental costs of $1.3 million per year. If Daily's marginal tax rate is 21%, what are the incremental earnings (net income) associated with the new machine?