Casa Grande Farms is considering purchasing multiple tractors for a total purchase price of$540 000. These tractors
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Question:
Casa Grande Farms is considering purchasing multiple tractors for a total purchase price of$540 000. These tractors are expected to generate EBITDA of $250 000 for each of the nextthree years. Casa Grande Farms has a 21% tax rate and has a cost of capital of 10%. Assumethat Casa Grande Farms is planning to sell the tractors after two years, when their book valueis $119 988, for a total price of $180 000. What is the net cash flowfrom this sale?
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