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You have been asked by the president of your company to evaluate the proposed acquisition of a new special - purpose truck for $ 7

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $70,000. The truck falls into the MACRS 3-year class, is not eligible for either bonus depreciation or Section 179 expensing, and it will be sold after three years for $20,800. Use of the truck will require an increase in NWC (spare parts inventory) of $2,800. The truck will have no effect on revenues, but it is expected to save the firm $23,600 per year in before-tax operating costs, mainly labor. The firms marginal tax rate is 21 percent.
What will the cash flows for this project be?

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