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Mersey Chemicais manufactures polypropyene that it ships to its customers via tank car Currently it plans to add two additional tank cars bo its feet
Mersey Chemicais manufactures polypropyene that it ships to its customers via tank car Currently it plans to add two additional tank cars bo its feet four years from now. However, a proposed plan expantion will require Mersey's transpor Givion to add these two addetonal tank cass in 1 yearn' time rather than in 4 years. The current oost of a tank car ia 819 milion, and this cost a nexprted to memain constant. Also, whle tank cars will last indefinilely, they will be depreciated straight-4ine over a five-year life for tax purposis. Suppose Merseys tax rala in 20%. When evaluating the proposed expansion, what incremestal tree cash flows should be included to accourt for the need to accelerate the purchase of the tank cars? Incremental FCF for yoar 0 is 5 milion. (Round to two decimai places and outhows as negative values)
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