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NO EXCEL! #4 Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $48,000 and will generate delivery revenue of $17,000 for
NO EXCEL!
\#4 Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $48,000 and will generate delivery revenue of $17,000 for each of the next 6 years. At the end of the 6 years, the vehicle will have a salvage value of $5,200. The tax rate is 21%.. Fink Co. wishes to borrow 25,000 at a Marr of 8% to purchase the vehicle to be payable in 4 years. The terms of the loan is for Fink Co. to pay constant interest for 4 years with the total payment due in the 4 rth year. Assuming that the vehicle is depreciated using MACRS 5-year property class, and that Fink Co. uses an after-tax MARR of 8%, compute the PW, and determine whether Fink Co. should purchase the new business vehicleStep by Step Solution
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