Question

Daily Enterprises is purchasing a $10.1 million machine. It will cost $47,000 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 $4.1 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 $ _____. (Round to the nearest dollar.)

Answer 1