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For the next two questions, a + sign is optional for any answer that is a net cash inflow, but a - sign is

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For the next two questions, a " +" sign is optional for any answer that is a net cash inflow, but a "-" sign is mandatory for any answer that is a net cash outflow. Reebok Ltd is purchasing a $7.5 million machine, which will cost the firm an additional $35,000 to have the machine transported and installed ready for use. The machine is expected to be depreciated to a value of $210000.0 over a tax life of 5 years via the straight-line method and sold at the end of its life. Experience has shown that these machines tend to sell at a price that is 20.0% higher than book value. The machine is expected to generate incremental revenues of $4.6 million per year for the firm while also causing incremental costs of $1.4 million per year. Reeboks marginal corporate tax rate is 37.5%. You are forecasting incremental free cash flows for Reebok Ltd (1) What is the incremental free cash flow associated with the new machine at t=0 ? The free cash flow at t=0 will be $ (Round your answer to the nearest dollar) (2) What is the annual depreciation expense? The annual depreciation expense is (Round your answer to the nearest dollar) (3) What is the annual incremental free cash flows each year from t=1 to t=4 ? The annual free cash flow from t=l to t=4 will be $ (Round your answer to the nearest dollar) (4) What is the expected after-tax salvage value at t=5 ? The after-tax salvage value is $ (Round your answer to the nearest dollar) (5) What is the incremental free cash flows for t=5 ? The free cash flow for t=5 is $ (Round your answer to the nearest dollar)

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