Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are evaluating a potential purchase of several light-duty trucks. The initial cost of the trucks will be $145,000. The trucks fall in the MACRS

image text in transcribed
You are evaluating a potential purchase of several light-duty trucks. The initial cost of the trucks will be $145,000. 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 14,500 at the end of five years. The expected revenue associated with the trucks is $111,000 per year with annual operating costs of $57,000. The firm's marginal tax rate is 40.0%. What is the after-tax operating cash flow for year 1 ? $29,000 $15,000 $32,400 $25,000 $44,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Governance Of Financial Management

Authors: John Carver, Miriam Carver

1st Edition

0470392541, 9780470392546

More Books

Students also viewed these Finance questions