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Bobby Jones, the club pro at Pebble Beach Golf Club, is considering replacing his fleet of golf carts. He bought the existing fleet of 1

Bobby Jones, the club pro at Pebble Beach Golf Club, is considering replacing his fleet of golf carts. He bought the existing fleet of
100 EZ-GO carts two years ago for $2,000 per cart. He is considering replacing them with a new model Club Car. Each Club Car has
GPS, a cooler, and a ball/club cleaner and costs $3,000. The golf carts are 5-year property with depreciation rates of 20%,32%,
19.2%, and 11.52% in the first four years.
If Mr. Jones sold the EZ-GO carts today, he could get $750 for each cart. One advantage of buying the new carts is that they are more
durable and so he can carry a smaller inventory of spare parts. Bobby figures his inventory will drop by $25,000.
If Bobby goes ahead with the golf cart replacement, what are the initial cash flows? Assume a tax rate of 35%.(Round your answer to
the nearest dollar.)
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