Question 9 (-110) Ford Motor Company is considering launching a new line of Plug-in Electric SUVs. In order to launch the new line, Ford needs to purchase new equipments for $20 million. These equipments are expected to last for 10 years with a residual value of 2 million. Ford pays a 30% marginal tax rate on its pre-tax income, and the average tax rate is 25%. How much is the net effect of depreciation on Ford's cash flow in the next year assuming that Ford uses a straight line depreciation? 0.54 million 2 0.6 million 3 0.45 million 0.5 million