CathFoods will release a new range of candies which contain anti-oxidants. New equipment to manufacture the candy will cost which will be depreciated by straight-line depreciation over six years. In addition, there will be
Spent on promoting the new candy line. It is expected that the range of candies will bring in revenues of
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

CathFoods will release a new range of candies which contain anti-oxidants. New equipment to manufacture the candy will cost  which will be depreciated by straight-line depreciation over six years. In addition, there will be 
Spent on promoting the new candy line. It is expected that the range of candies will bring in revenues of 
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?

Quizplus · Accepted Answer

A) Depreciation = 4 / 6 = $0.66666667 million; earnings before 11eaabab_c093_a4e8_b90e_cfeacc84131e_TB5536_11 earnings after 11eaabab_c093_cbf9_b90e_bf332103e3ae_TB5536_11

CathFoods Will Release a New Range of Candies Which Contain