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Part 1

Daily Enterprises is purchasing a

$10.2

million machine. It will cost

$52,000

to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. The machine will generate incremental revenues of

$3.8

million per year along with incremental costs of

$1.2

million per year. If Daily's marginal tax rate is

35%,

what are the incremental earnings (net income) associated with the new machine?

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Part 1

The annual incremental earnings are

$enter your response here.

(Round to the nearest dollar.)