Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $6,300 and sell its old washer for $2,100. The new washer will last for 6 years and save $1,300 a year in expenses. The opportunity cost of capital is 12%, and the firm's tax rate is 21%

a) If thr firm uses straight-line depreciation over a 6-year life, what are the cash flow on the project in years 0 to 6? The new washer will have zero salvage value after 6 years, and the old washer is fully depreciated.

b) What is the prohevt NPV?

c) What is NPV if the firm investment is entitled to immediate 100% bonus depreciation

your landscaping company can keade a truck for $7,700 a year (paid at year-end) for 7 years. It can instead buy the truck for $41,000. The teuck will be valueless after 7 years. The interest rate your comosny can earn on its funds is 8%.

a) What is the present value of the cost of leasing

b) Is it cheaper to buy or lease?

c) What is the present value of the cost of leasing if the payments are an annuity due, so the first payment comes immediately?

d) Is it now cheaper to buy or lease?