1. Daily Enterprises is purchasing a $14,000,000 machine. The machine will be depreciated using straight-line depreciation over its 10 year life and will have no salvage value. The machine will generate revenues of $7,500,000 per year along with fixed costs of $2,000,000 per year.

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1. If Daily's marginal tax rate is 28%, what will be the cash flow in each of years 1 to 10 (the cash flow will be the same each year)?
2. If the discount rate is 6%, what is the NPV of the project? The cash flow each year is $4,352,000.
3. Should Daily accept or reject the project (choose one)?
4. Find the Net Present value Break-even level of revenues, assuming the costs are all fixed costs.