Hershey is considering a new candy that will generate $30 million in sales and $20 million in cost of goods sold each year for the next 5 years (does not include depreciation expense). They will need a new machine that costs $20 million dollars. They will depreciate the machine to a zero book value using straight-line depreciation over 5 years. The machine can be sold at the end of the 5 years for $2,000,000. The tax rate is 40%. Determine the annual free cash flows.

		Years 1 through 4: $3,600,000; year 5: $4,800,000
		Years 1 through 4: $3,600,000; year 5: $5,600,000
		Years 1 through 4: $7,600,000; year 5: $9,600,000
		Years 1 through 4: $7,600,000; year 5: $8,800,000