Incremental free cash flows in second year of this project

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Reference no: EM131185284

CathFoods will release a new range of candies which contain antioxidants. New equipment to manufacture the candy will cost $4 million, which will be depreciated by straight-line depreciation over 5 years. In addition, there will be $5 million spent on promoting the new candy line. It is expected that the range of candies will bring in revenues of $6 million per year for five years with production and support costs 1.5 million per year . If CathFood's marginal tax rate is 35%, what are the incremental freee cash flows in the second year of this project? a-2.100 million b- 3.205 million c- 3.700million d- 1.295 million

Reference no: EM131185284

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