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CathFoods will release a new range of candies which contain antioxidants. New equipment to manufacture the candy will cost $2 million, which will be depreciated
CathFoods will release a new range of candies which contain antioxidants. New equipment to manufacture the candy will cost $2 million, which will be depreciated by straight-line depreciation over six years. In addition, there will be $5 million spent on promoting the new candy line. It is expected that the range of candies will bring in revenues of $4 million per year for six years with production and support costs of $1.5 million per year. If CathFoods' marginal tax rate is 20%, what are the incremental free cash flows in the second year of this project? O A) $2.067 million B) $0.433 million C) $0.800 million OD) $2.167 million
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