Question: q7 George Corp. is considering undertaking a project that has estimated sales of $20 million a year. The variable production costs are 60% of sales.

George Corp. is considering undertaking a project that has estimated sales of $20 million a year. The variable production costs are 60% of sales. Cash fixed costs are $2.0 million a year. The project lasts 10 years. The equipment needed for the project costs $10 milion and will be depreciated using MACRS method and has a 5-year MACRS classification (table below). There are no other costs. The tax rate is 20%. What is Earnings Before Interests and Taxes (EBIT) for year 5 (enter your answer in millions)

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