Daily Enterprises is purchasing a $14,000,000 machine. The machine will be depreciated using straight-line depreciation over its 7 year life and will have no salvage value. The machine will generate revenues of $10,000,000 per year along with costs of $1,500,000 per year.

If Daily's marginal tax rate is 30%, what will be the cash flow in each of years 1 to 7 (the cash flow will be the same each year)?

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: 6,550,0001

Given annual cash flows of $6,550,000, if the discount rate is 8%, what is the NPV of the project?

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Should Daily accept or reject the project (choose one)?

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		Accept
		Reject