Chevron Phillips (CP) has put into place new laboratory equipment for the production of chemicals; the cost is $1,830,000 installed. CP borrows 45% of all capital needed, and the borrowing rate is 13.1%. In the 1st year, 24% of the principal borrowed will be paid back. The throughput rate for in-process test samples has increased the capacity of the lab, saving a net of $X per year. In this 1st year, depreciation is $340,000 and taxable income is $318,000.

What is the gross income or annual savings $X?

determine the income tax for the first year assuming a marginal tax rate of 40%.

what is the after-tax cash flow after the first year?