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Mersey Chemicals manufactures polypropylene that it ships to its customers via tank car. Currently it plans to add two additional tank cars to its fleet
Mersey Chemicals manufactures polypropylene that it ships to its customers via tank car. Currently it plans to add two additional tank cars to its fleet four years from now. However, a proposed plant expansion will require Mersey's transport division to add these two additional tank cars in years time rather than in years. The current cost of a tank car is $million and this cost is expected to remain constant. Also, while tank cars will last indefinitely, they will be depreciated straightline over a fiveyear life for tax purposes. Suppose Mersey's tax rate is rate is When evaluating the proposed expansion, what incremental free cash flows should be included to account for the need to accelerate the purchase of the tank cars?
Incremental FCF for year is million. Round to two decimal places and outflows as negative values. When evaluating the proposed expansion, what incremental free cash flows should be included to account for the need to accelerate the purchase of the tank cars?
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Incremental FCF for year is $ million. Round to two decimal places and outflows as negative values.
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