CathFoods will release a new range of candies which contain antioxidants.New equipment to manufacture the candy will cost $2 million,which will be depreciated by straight-line depreciation over five years.In addition,there will be $5 million spent on promoting the new candy line.It is expected that the range of candies will bring in revenues of $4 million per year for five years with production and support costs of $1.5 million per year.If CathFood's marginal tax rate is 35%,what are the incremental free cash flows in the second year of this project?
A) $1.765 million
B) $2.015 million
C) $2.415 million
D) $2.500 million
Correct Answer:
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