Daily Enterprises is purchasing a $ $10\mathrm{.}4$ million machine. It will cost $ $52000$ to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. Assume that CCA deductions are the same as depreciation expenses. The machine will generate incremental revenues of $ $4\mathrm{.}2$ million per year along with incremental costs of $ $1\mathrm{.}4$ million per year. If$$ Daily's marginal tax rate is $35\%,$ what are the incremental earnings associated with the new$$ machine?

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To calculate the incremental earnings associated with the new machine we need to determine the annua... View the full answer