Question
Daily enterprises is purchasing a 10 million machine. It will cost 50000 to transport and install the machine. The machine has a depreciable life of
Daily enterprises is purchasing a 10 million machine. It will cost 50000 to transport and install the machine. The machine has a depreciable life of five years using straight line depreciation and will have no salvage value. The machine will generate incremental revenues of 4 million per year along with incremental cost of 1.2 million per year. Daily marginal tax rate is 35%. You are forecasting incremental free cash flows for daily enterprises. What are the incremental free cash flows associated with the new machine?
A) The free cash flow for year 0? (round to nearest dollar)
B) The free cash flow for years 1-5? (round to nearest dollar)
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