Question
Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $7,000,000 to buy the machine and $20,000
Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $7,000,000 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 seven years and will be depreciated over those seven years.the marginal tax rate is 40% . what are the incremental free cash associated with the new machine in year 2 ?
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