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Please help You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $50,000. The
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You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $50,000. The truck falls into the MACRS 3-year class, is not eligible for either bonus depreciation or Section 179 expensing, and it will be sold after three years for $19,100. Use of the truck will require an increase in NWC (spare parts inventory) of $1,100. The truck will have no effect on revenues, but it is expected to save the firm $17,200 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 21 percent. What will the cash flows for this project be? (Negative omounts should be indicoted by o minus sign. Round your answers to 2 decimal pleces.) Step by Step Solution
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