Problem 5 Intro 8 years ago, a new machine cost $7,000,000 to purchase and an additional $540,000 for the installation. The machine was to be linearly depreciated to zero over 30 years. The company has just sold the machine for $4,200,000, and its marginal tax rate is 25%. Part 1 Attempt 1/20 for 10 pts. What is the annual depreciation? 0+ decima Submit Part 2 1 8 Attempt 1/20 for 10 pts. What is the current book value? 0+ decima Submit Part 3 7 8 Attempt 1/20 for 10 pts. What is the after-tax salvage value? 0+ decima SubmitProblem 6 Intro Southwest Airlines just bought a new jet for $23,000,000. The jet falls into the 7-year MACRS category, with the following depreciation rates (half-year convention): Year 1 2 3 4 5 6 7 8 Depr. 14.29% 24.49% 17.49% 12.49% 8.93% 8.92% 8.93% 4.46% rate The jet can be sold for $18,400,000 after 5 years. The company has a marginal tax rate of 34%. Part 1 1 8 Attempt 1/20 for 10 pts. What is the book value at the end of year 5? 0+ decima Submit Part 2 0 8 Attempt 1/20 for 10 pts. What is the after-tax salvage value at the end of year 5? 0+ decima SubmitI'l'ODIel'II 3 41 Intro BKM Industries spent $10,000 on a feasibility study to expand its production capacity. The company decided to go ahead with the expansion: It will need to buy a new machine for $58,000 and spend $8,000 on installing it. The machine will be depreciated linearly to zero over a 5-year period and it will have no salvage value. The machine will create $75,000 in incremental revenues per year and $52,500 in incremental costs per year. The company's marginal tax rate is 34%. Part 1 l' Attempt1/20for10pts. What is the incremental free cash flow associated with the expansion in year 0 (initial investment)? 0+ decima Part 2 l' Attempt1120for10pts. What is the incremental free cash flow associated with the expansion in year 1 ? 0+ decima