The Dairy Corporation is considering the purchase of a new machine that will cost $91,000.The machine is

Fantastic news! We've Found the answer you've been seeking!

Question:

The Dairy Corporation is considering the purchase of a new machine that will cost $91,000.The machine is expected to increase revenues by $27,000 a year and cash expenses by $8,000. The machine will be depreciated using straight -line depreciation under IRS rules over 7 years. The firm pays taxes at a marginal rate of 40%.

Calculate the incremental annual cash flows if Dairy purchases the machine.