Question: New Balance is purchasing a $7.1 million machine, which will cost the firm an additional $48,000 to have the machine transported and installed ready

New Balance is purchasing a $7.1 million machine, which will cost the

New Balance is purchasing a $7.1 million machine, which will cost the firm an additional $48,000 to have the machine transported and installed ready for use. The machine is depreciated to a value of zero over a tax life of 5 years via the straight-line method. It will also be worthless in the salvage market at this time. The machine is expected to generate incremental revenues of $6.5 million per year for the firm while also causing incremental costs of $1.9 million per year. New Balance's marginal tax rate is 40.0%. a) What is the incremental free cash flow associated with the new machine at t=0? The free cash flow at t=0 will be $ (Please enter your answer to the nearest dollar) b) What is the annual incremental free cash flows each year from t=1 to t=5? The annual free cash flow from t=1 onward will be $ (Please enter your answer to the nearest dollar)

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