Question
A basketball manufacturer adds basketball hoops to its product line. New equipment to manufacture the basketball hoops will cost $1 million, which will be depreciated
A basketball manufacturer adds basketball hoops to its product line. New equipment to manufacture the basketball hoops will cost $1 million, which will be depreciated by straight-line depreciation over five years. In addition, there will be $3 million spent on promoting the new basketball hoops line. It is expected that the range of basketball hoops will bring in revenues of $5 million per year for five years with production and support costs of $1.4 million per year. If the manufacturer's marginal tax rate is 45%, the incremental free cash flows in the second year of this project are ________ million
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