Question
You are evaluating a potential purchase of several light-duty trucks. The initial cost of the trucks will be $193,000. The trucks fall in the MACRS
You are evaluating a potential purchase of several light-duty trucks. The initial cost of the trucks will be $193,000. The trucks fall in the MACRS 5-year class that allows depreciation of 20% the first year, 32% the second year, 19% the third year, 12% the fourth year, 11% the fifth year, and 6% the sixth year. You expect to sell the trucks for 19,300 at the end of five years. The expected revenue associated with the trucks is $153,000 per year with annual operating costs of $81,000. The firm's marginal tax rate is 35.0%. What is the after-tax cash flow associated with the sale of the equipment?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started