1. Daily Enterprises is purchasing a $ 10.1 million machine. It will cost $55,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. If Daily uses straight-line depreciation, what are the depreciation expenses associated with this machine?

The yearly depreciation expenses are $__? (Round to the nearest dollar.)

2. Daily Enterprises is purchasing a $ 9.7 million machine. It will cost $49,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. The machine will generate incremental revenues of $ 4.3 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 (net income) associated with the new machine?

The annual incremental earnings are $_? (Round to the nearest dollar.)

3. You are upgrading to better production equipment for your firm's only product. The new equipment will allow you to make more of your product in the same amount of time. Thus, you forecast that total sales will increase next year by 16 % over the current amount of 91,000 units. If your sales price is $18 per unit, what are the incremental revenues next year from the upgrade?

The incremental revenues are $__? (Round to the nearest dollar.)

4. You have a depreciation expense of 0$478,000 and a tax rate of 35 % What is your depreciation tax shield?

The depreciation tax shield will be $_ ? (Round to the nearest dollar.)

5. You have forecast pro forma earnings of $1,037,000. this includes the effect of $162,000 in depreciation. You also forecast a decrease in working capital of $101,000 that year. What is your forecast of free cash flows for that year?

The free cash flows from earnings will be $__? (Round to the nearest dollar.)