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Daily Enterprises is purchasing a $ 1 0 . 4 million machine. It will cost $ 5 2 0 0 0 to transport and install

Daily Enterprises is purchasing a $ 10.4 million machine. It will cost $ 52000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. Assume that CCA deductions are the same as depreciation expenses. The machine will generate incremental revenues of $ 4.2 million per year along with incremental costs of $ 1.4 million per year. If Daily's marginal tax rate is 35%, what are the incremental earnings associated with the new machine?

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