1. Daily Enterprises purchases a $10 million machine to be depreciated on a straight line basis over 5 years. The machine generates incremental revenues of $4 million per year, along with incremental costs of $1 million per year. If the marginal tax rate is 25%, compute the incremental free cash flow (at the end of year 1) generated from the new machine.

   		$2.75 million
   		$2.60 million
   		$2.40 million
   		$1.50 million