SHOW WORK

To help pay for college, you decide to start a moving company and run it for the next two years. To start the company, you need to buy a moving truck for $20,000 (t=0). Each year, you believe you can book 30 clients and charge $500 per client (t-1 and 2). Each year you will also have to pay advertising costs of $1,000 (t-1 and 2). Finally, you will depreciate the moving truck by 54000 each year (t-1 and 2), and, after 2 years, the moving truck will be can be sold for 512.000 (t-2). The tax rate for your moving company is 18% and the discount rate is 12%. A 14 points) What is the after-tax salvage value for the truck at t-2? B (8 points) What are FCF_O. FCF_1 and FCF_2? C(4 points What is the NPV of this moving company? (if you did not calculate the FCF above, assume that the FCF is $500 for t=0,- 1 and t - 2)