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Cameron industries is purchasing a new chemical vapor depositor in order to make slicon chips. It will cost $6,000,000 to buy the machine and $20,000
Cameron industries is purchasing a new chemical vapor depositor in order to make slicon chips. It will cost $6,000,000 to buy the machine and $20,000 to have it delivered and instaled. Busting at cloan room in the plant for the mochine will cost an additional $3 million. The machine is expected to rise gross profts by $3.000,000 per year, starting at the and of the fist yoar, with associated costs of $1 milion for each of those years. The machine is expected to have a working life of six years and wil be depreciated over those six years. The marginal tax rate b 20\%. What ave the incremental free cash flows associated with the now machine in yoor 0 ? A. $6,000,000 B. $8.118.000 C. $1,003,333 D. $9,020,000
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