Incremental free cash flows associated with the new machine

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Daily Enterprises is purchasing a $ 9.6$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 $1.3 million per year. Daily's marginal tax rate is 35 %. 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

The free cash flow for years 1–5 will be

Reference no: EM132068873

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