A robotics company is installing a new automated production line. The total cost of the machinery is $6,500,000, with an installation fee of $15,000 and a facility upgrade cost of $1,200,000. The machine is expected to increase gross profits by $3,800,000 per year for five years. Annual associated costs: $900,000. Depreciation method: Straight-line over five years. Marginal tax rate: 30% What are the incremental free cash flows associated with the new machine in year 2? A. $2,492,900 B. $2,415,000 C. $2,750,000 D. $2,620,000

What is the operating income ?

Varaiya Manufacturing determines that 30,500 pounds of direct materials are needed for production in August. There are 2,000 pounds of direct materials on hand at August 1, and the desired ending inventory is 1,800 pounds. If the cost per pound of direct materials is $3.20, what is the budgeted total cost of direct materials purchases? Correct answer