You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000. The truck falls into the MACRS. 3-year class, and it will be sold after three years for $20,000. The use of the truck will require an increase in NWC (spare parts inventory) of $2,000. The truck will have no effect on revenues, but it is expected to save the firm $20,000 per year in before-tax operating costs, mainly labor. The firms marginal tax rate is 40 percent, an opportunity cost of capital of 8 percent.

Please complete it in the same format as this excel worksheet below!

Q.1 What will the cash flows for this project be? Q.2 According to the Management Report, should KADS go forward with the project?