The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years. The cost of the machine is $30,000 and the machine will be depreciated straight line over its three-year life to a residual value of $0.

The cane manufacturing machine will result in sales of 2000 canes in year 1. Sales are estimated to grow by 10% per year each year through year three. The price per cane that Sisyphean will charge its customers is $18 each and is to remain constant. The canes have a cost per unit to manufacture of $9 each.

The firm is in the 35% tax bracket, and has a cost of capital of 10%. The incremental EBIT in the first year for the Sisyphean Corporation's project is closest to:

A.

$18,000

B.

$8,000

C.

$11,700

D.

$5,200