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Burlington Motor Carriers, a trucking company, is considering the installation of a two-way mobile satellite messaging service on its 2,000 trucks. From tests done last

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Burlington Motor Carriers, a trucking company, is considering the installation of a two-way mobile satellite messaging service on its 2,000 trucks. From tests done last year on 120 trucks, the company found that satellite messaging could cut 60% of its $6 million bill for long-distance communications with truck drivers. More importantly, the drivers who used this system reduced the number of "deadhead" miles - those driven without paying loads by 0.8%. Applying that improvement to all 230 million miles covered by the Burlington fleet each year would produce an extra $1.20 million in savings. Equipping all 2,000 trucks with the satellite hookup will require an investment of $12 million and the construction of a message-relaying system costing $2 million. The equipment and onboard devices will have a service life of eight years and negligible salvage value; they will be depreciated under the five-year MACRS class. Burlington's marginal tax rate is about 25%, and its required minimum attractive rate of return is 15%. Click the icon to view the MACRS depreciation schedules. (a) Determine the annual net cash flows from the project. Fill in the table below. (Round to four decimal places.) Burlington Motor Carriers, a trucking company, is considering the installation of a two-way mobile satellite messaging service on its 2,000 trucks. From tests done last year on 120 trucks, the company found that satellite messaging could cut 60% of its $6 million bill for long-distance communications with truck drivers. More importantly, the drivers who used this system reduced the number of "deadhead" miles - those driven without paying loads by 0.8%. Applying that improvement to all 230 million miles covered by the Burlington fleet each year would produce an extra $1.20 million in savings. Equipping all 2,000 trucks with the satellite hookup will require an investment of $12 million and the construction of a message-relaying system costing $2 million. The equipment and onboard devices will have a service life of eight years and negligible salvage value; they will be depreciated under the five-year MACRS class. Burlington's marginal tax rate is about 25%, and its required minimum attractive rate of return is 15%. Click the icon to view the MACRS depreciation schedules. (a) Determine the annual net cash flows from the project. Fill in the table below. (Round to four decimal places.)

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