Q6- A company buys a numerically controlled (NC) machine for $28,000 (year 0) and uses it for 5 years after which it is scrapped. The allowed depreciation deduction during the first year is $4,000, as the equipment falls into the category of seven-year MACRS property. The cost of the goods produced by t NC machine should include a charge for the depreciation of the machine. Suppose the company estimates the following revenues and expenses, including depreciation, for the first operating year: Gross income= $50,000 Cost of goods sold=$20,000 Depreciation of NC machine= $4,000 Operating expenses= $6,000 a) If the company pays taxes at the rate of 40% on its taxable income, what is its net income fr the project during the first year? b) Assume that all sales are cash sales, and all expenses were paid during year 1. How much would be generated from operations? (15p)