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Hardware Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $4,900,000 to buy the machine and $100,000

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Hardware Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $4,900,000 to buy the machine and $100,000 to have it delivered and installed. The machine is expected to work for five years and raise gross profits by $4,730,000 per year, starting at the end of the first year. Other general expenses associated with using the machine are estimated at $950 thousand for each of those years. The machine will be depreciated over five years using the straight-line method. The marginal tax rate is 40%. What are the incremental free cash flows associated with the new machine in year 0 of the project? Assume the machine is purchased in year 0 and starts depreciating in year 1 of the project. - $4,900,000 $5,000,000 $5,010,000 .$835,000 $3,006,000 .$5,500,000

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