cathfoods will release a new range of candies which contain anti-oxidants. new equipment to manufacture the candy will cost $4million which will be depreciated by straight-line depreciation over six years. in addition, there will be $5million spent on promoting the new candy line. it is expected that the range of candies will bring in revenues of $6million per year for five years with production and support costs of $1.5 million per year. if cathfoods' marginal tax rate is 35%, what are the incremental earnings in the second year of this project?

Question

04-11-2022
Business

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cathfoods will release a new range of candies which contain anti-oxidants. new equipment to manufacture the candy will cost $4million which will be depreciated by straight-line depreciation over six years. in addition, there will be $5million spent on promoting the new candy line. it is expected that the range of candies will bring in revenues of $6million per year for five years with production and support costs of $1.5 million per year. if cathfoods' marginal tax rate is 35%, what are the incremental earnings in the second year of this project?

Sagot :

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