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Considerate the inflation % Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $50,000 and will generate constant-dollar delivery revenue of
Considerate the inflation %
Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $50,000 and will generate constant-dollar delivery revenue of $20,000 (year 0 dollars) for each of the next 6 years. At the end of the 6 years, the vehicle will have a salvage value of $5,000. The tax rate is 21%, and annual inflation is 3%. Assuming that the vehicle is depreciated using MACRS (5-year property class) and that Fink Co. uses an after-tax real interest MARR of 8%, compute the PW, and determine whether Fink Co. should purchase the new business vehicle. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. tA $Step by Step Solution
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