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Heartland Foods will release a new range of candies which contain anti-oxidants. New equipment to manufacture...

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

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 11 months ago
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