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Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $ 5 , 0 0 0 ,

Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost
$5,000,000 to buy the machine and $20,000 to have it delivered and installed. Building a clean room in the plant
for the machine will cost an additional $3 million. The machine is expected to raise gross profits by $3,500,000
per year, starting at the end of the first year, with associated costs of $1 million for each of those years. The
machine is expected to have a working life of six years and will be depreciated over those six years. The marginal
tax rate is 20%. What are the incremental free cash flows associated with the new machine in year 2?
A. $2,167,333
B. $830,000
C. $836,667
D. $1,663,333
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