N1

Daily Enterprises is purchasing a$10.4million machine. It will cost$54,000to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of$3.9million per year along with incremental costs of$1.3million per year. Daily's marginal tax rate is35%. You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free cash flows associated with the new machine?