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CathFoods will release a new range of candies which contain antioxidants. New equipment to manufacture the candy will cost $4 million, which will be depreciated

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CathFoods will release a new range of candies which contain antioxidants. New equipment to manufacture the candy will cost $4 million, which will be depreciated by straight - fine depreciation over five years. In addition, there wit be $5 militon spent on promoting the new candy line. It is expected that the range of candies will bring in revonues of $6 million per year for five 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? A. 53.7 milion B. $12 milion c. $0.74 million D. $3.76 miltion

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