Business, 01.05.2021 17:50 rosenthaljaneiah2010

Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $7,000,000 to buy the machine and $20,000 to have it delivered and installed. Building a clean room in the plant for the machine will cost an additional $3 million. The machine is expected to raise gross profits by $4,500,000 per year, starting at the end of the first year, with associated costs of $1 million for each of those years. The machine is expected to have a working life of seven years and will be depreciated over those seven years. The marginal tax rate is 40%. What are the incremental free cash flows associated with the new machine in year 0? A) -$10,020,000
B) -$7,000,000
C) -$9,018,000
D) $1,002,857

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Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It w...

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