CathFoods will release a new range of candies which containanti-oxidants. New equipment to manufacture the candy will cost $3million, which will be depreciated bystraight-line depreciation over five years. Inaddition, there will be $5million spent on promoting the new candy line. It is expected that the range of candies will bring in revenues of $5million per year for five years with production and support costs of$1.5 million per year. IfCathFood's marginal tax rate is35%, what are the incremental earnings in the second year of thisproject?

A.

$1.750 million

B.

$1.885 million

C.

$1.015 million

D.

$2.900 million