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Annual Incremental Earnings

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Daily Enterprises is purchasing a $10.5 million machine. It will cost $55,000 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 $4.3 million per year along with incremental costs of $1.5 million per year.

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Solution Summary

The solution computes the annual incremental earnings.

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Lets calculate the depreciation first,

Depreciable cost = 10,500,000 + 55,000 = ...

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