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A company is planning to release a new product. The equipment needed to start production costs $9,346 and will be depreciated linearly over 3 years.

A company is planning to release a new product. The equipment needed to start production costs $9,346 and will be depreciated linearly over 3 years. The firm expects to sell 125 units of the product with a unit price of $137 with a gross margin of 56%. Other operating costs are $12 per unit. If the company's marginal tax rate is 26% what are the incremental earnings?

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