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Cell Styles J24 fx The truck falls into the MACRS three-year class, and it will be sold after three years for $10,000. Use of the
Cell Styles J24 fx The truck falls into the MACRS three-year class, and it will be sold after three years for $10,000. Use of the truck will require an increase in NWC (spare parts inventory) of $2,500 in year 0 and will be recovered at the end of the project. The truck will have no effect on revenues, but it is expected to save the firm $20,000 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 21 percent. The WACC of the firm is set at 12%. Calculate the cash flows for this project? Info given: WACC = caoital spending= sales change = cost savings= tax rate= MV of salvage value =$ MARCS 3-year schedule year depreciation rate (12 pts) Year Sales COGS Depreciation EBIT FA NWC OCF total FCF 0 1 2 3
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