Question: Y Inc. is considering expanding its business. It will require an initial investment of $ 5 million in a new factory, which generates $ 1

Y Inc. is considering expanding its business. It will require an initial investment of $5 million in a new factory, which generates $10 million annual revenue, and $7 million cost of goods sold for the next 10 years. Assume straight-line depreciation and 40% tax rate.
a. What is the annual depreciation?
b. What are the annual free cash flows?

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