CathFoods will release a new range of candies which contain antioxidants. New equipment to manufacture the candy will cost $3 million, which will be depreciated by straight-line depreciation over five years. In addition, there will be $5 million spent on promoting the new candy line in the first year. It is expected that the range of candies will bring in revenues of $5 million per year for five years with production and support costs of $1.5 million per year. If CathFood's marginal tax rate is 35%, what are the incremental free cash flows in the second year of this project?

A.

$1.750 million

B.

$2.900 million

C.

$1.015 million

D.

$2.485 million