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Daily Enterprises is purchasing a $9.7 million machine. It will cost $45,000 to transport and install the machine. The machine has a depreciable life of

Daily Enterprises is purchasing a

$9.7 million machine. It will cost

$45,000 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

$1.1 million per year. If Daily's marginal tax rate is

35%, what are the incremental earnings associated with the new machine?

The annual incremental earnings are $

nothing

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