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Finance

A. You are upgrading production equipment that will let you make more of your product in the same time.You forecast that total sales will increase by 18% next year, over the present amount of 107,000 units. If your sales price is $18 per unit, what are the incremental revenues next year from the upgrade?

B. Your business is purchasing a $10.3 million machine. It will cost $52,000 to transport and install the machine. The machine has a depreciable life of 5 years and will have no salvage value. The machine will generate incremental revenues of $4.1 million per year along with incremental costs of $1.4 million per year. If your business' marginal tax rate is 35%, what are the incremental earnings (net income) associated with the new machine?

C. You have a depreciation expense of $ 456,000 and a tax rate of 38%. What is your tax shield?

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