Daily Enterprises is purchasing a $10.1 million machine. It will cost $52,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. Assume that CCA deductions are the same as depreciation expenses. The machine will generate incremental revenues of $3.9 million per year along with incremental costs of $1.3 million per year. If Daily's marginal tax rate is 35%, what are the incremental earnings associated with the new machine? ..... The annual incremental earnings are SI (Round to the nearest dollar.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Daily Enterprises is purchasing a $10.1 million machine. It will cost $52,000 to transport and install the machine. The machine has a depreciable life of five years
and will have no salvage value. Assume that CCA deductions are the same as depreciation expenses. The machine will generate incremental revenues of $3.9
million per year along with incremental costs of $1.3 million per year. If Daily's marginal tax rate is 35%, what are the incremental earnings associated with the new
machine?
.....
The annual incremental earnings are S (Round to the nearest dollar.)
Transcribed Image Text:Daily Enterprises is purchasing a $10.1 million machine. It will cost $52,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. Assume that CCA deductions are the same as depreciation expenses. The machine will generate incremental revenues of $3.9 million per year along with incremental costs of $1.3 million per year. If Daily's marginal tax rate is 35%, what are the incremental earnings associated with the new machine? ..... The annual incremental earnings are S (Round to the nearest dollar.)
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