Planet Enterprises is purchasing a

$9.6

million machine. It will cost

$46 000

to 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

$4.3

million per year along with incremental costs of

$1.5

million per year. Planet's marginal tax rate is

30%.

You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free cash flows associated with the new machine?

The free cash flow for year 0 will be?

Use this formula:free cash flows: after-tax earnings+depreciation-capital expenditure-changes in NWC