Question: firm is considering taking a project that will produce $ 1 2 million of revenue per year. Cash expenses will be $ 5 million, and

firm is considering taking a project that will produce $12 million of revenue per year. Cash expenses will be $5 million, and depreciation expenses will be $1 million per year. If the firm takes that project, then it will reduce the cash revenues of an existing project by $3 million. What is the free cash flow on the project, per year, if the firm is in the 30 percent marginal tax rate?

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