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PLEASE, DO NOT COPY ANOTHER ANSWER. THESE QUESTIONS ARE DIFFERENT AND THE ANSWERS WILL BE WRONG. PLEASE SHOW WORK AND ACTUALLY HELP ME. THANK YOU. ALSO COMPLETE ALL PARTS. THANK YOU.
Ken Smith wants to start a deck and fence company. To start the business, Ken plans to invest $70,000 in pick-up trucks and tools. Ken is forecasting that he will build 100 decks in the first year and 120 decks in years 2 and 3. He anticipates that the average deck will be priced at $6,500. Ken estimates that the cost of lumber for the typical deck is $2,000. Rent, office expenses, vehicle expenses, wages and salaries will total $350,000 per year. Ken plans to carry an inventory of lumber of $25,000. At the end of three years, Ken thinks that he can sell the trucks for $10,000, but the tools will be worthless. The corporate tax rate is 30%. What are the terminal year cash flows? (Assume that depreciation is not tax deductible.) Round your answers to the nearest dollar. $Step by Step Solution
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