Question
The local franchise of Jiffy Lube is thinking of buying a new lift for $90,000 that would make it easier to access the oil filter
The local franchise of Jiffy Lube is thinking of buying a new lift for $90,000 that would make it easier to access the oil filter in customers' cars and save labor. The savings would increase over the project's 3-year life, in line with the projected growth of the business: A B C D Year 1 2 3 Cost savings 50,000 55,000 66,000 The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The company uses a discount rate of 14% and has a tax rate of 21%. What is the free cash flow in year 3? What is the NPV*please explain the math so i can understand
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