Project	Year-1	Year-2	Year-3	Year-4	Year-5	Year-6	Year-7	Year-8
Cost of Capital (borrowing)	12.00%
Cost of Truck	$200,000
Cost of additional equiment attached to truck	$15,000
Tax rate	35%
Annual Before Tax & Depreciation Truck Projected Earnings		$70,000	$70,000	$65,000	$60,000	$55,000	$50,000	$40,000	$30,000
Depreciation Percentage Rate (MACRS)*		20.0%	32.0%	19.2%	11.5%	11.5%	5.8%	0.0%	0.0%
* The proposed truck has an estimated economic life of seven years but will be treated as a five-year MACRS property for depreciation purposes.

depreciation purposes.

Year-0

Year-1

Year-2

Year-3

Year-4

Year-5

Year-6

Year-7

Year-8

Annual Before Tax & Depreciation Truck Projected Earnings

Depreciation Expense

Annual Before Tax Truck Projected Earnings

Tax

Annual Projected Truck Earnings

Depreciation to add back

Projected Truck Net Cash Flow

Pay Back Period		Years
Discounted Pay Back Period (DPB)**		Years
Net Present Value
Internal Rate of Return
Profitability Index
Discounted Cash Flow Needed for DPB Calc. Year1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 I need to figure out if Franks Smith Plumbing can afford to purchase a new truck by doing the cash flow analysis