Daily Enterprises is purchasing a $5,000,000 machine. The machine will be depreciated using straight-line depreciation over its 8 year life and will have no salvage value. The machine will generate revenues of $9,000,000 per year along with fixed costs of $3,500,000 per year.

If Daily's marginal tax rate is 34%, what will be the cash flow in each of years 1 to 8 (the cash flow will be the same each year)?

Enter your answer rounded to the nearest whole number.

Enter your answer below.

Correct: 3,842,5001

If the discount rate is 6%, what is the NPV of the project? The cash flow each year is $3,842,500.

Enter your answer rounded to the nearest whole number.

Enter your answer below.

Correct: 18,861,133100

Should Daily accept or reject the project (choose one)?

Enter your answer below.

		Accept
		Reject

Correct: Accept

Find the Net Present value Break-even level of revenues, assuming the costs are all fixed costs. Enter your answer rounded to the nearest whole number.

Correct: 4,398,000100