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PLEASE DO IT IN EXCEL 4. The SS Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to
PLEASE DO IT IN EXCEL
4. The SS Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is 10% Year 0 1 2. 3 4 5 Annual operating CF Salvage Value (22,500) 22,500 6,250 17,500 6.250 14,000 6.250 11,000 6,250 5.000 6.250 0 Should the firm operate the truck until the end of its 5-year physical life, or, if not, what is its optimal economic lifeStep by Step Solution
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