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Use the following data to answer the next THREE questions: Molly is considering opening a Campus Delivery business. The initial investment for the business
Use the following data to answer the next THREE questions: Molly is considering opening a Campus Delivery business. The initial investment for the business is $200,000, which includes purchasing delivery vehicles and other investments. For tax purposes, the projected salvage value of the delivery vehicles is $62,000 The government requires depreciating the vehicles using the straight-line method over the business's life of 5 years. Molly is trying to estimate the net cashflows after tax for this business. She has already figured out that the business will generate an annual after-tax cash inflow of $54,000 from the operation. She now needs your help to estimate the net cash inflow that she will receive from selling the delivery vehicles at the end of 5 years. 1. In the best-case scenario, Molly can sell the vehicles at the end of 5 years for $88,000 Assuming the tax rate of 30%, what is the net after-tax cashflow Molly will receive from selling her delivery vehicles at the end of 5 years? O $7,800 O $54,200 O $80,200 O $95,800 O $88.000 2. In the worst-case scenario, Molly can sell the vehicles at the end of 5 years for $34,000. Assuming the tax rate of 30%, what is the net after-tax cashflow Molly will receive from selling her delivery vehicles at the end of 5 years? O $42,400 O $34,000 O $25,600 O $8,400 O $70,400 D
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