New range of candies which contain anti-oxidants

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Reference no: EM132063941

CathFoods will release a new range of candies which contain anti-oxidants. New equipment to manufacture the candy will cost $ 5 million comma which will be depreciated by straight-line depreciation over four 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 $ 7 million per year for five years with production and support costs of? $1.5 million per year. If CathFood's marginal tax rate is 35%, what are the incremental earnings in the second year of this project?

Reference no: EM132063941

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