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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 $50,000. The truck

You have been asked by the president of your company to evaluate the proposed acquisition of a new special purpose truck for $50,000. The truck falls into the MACRS 3 year class, and it will be sold after 3 years for $20,100. Use of the truck will require an increase in NWC of $2,100. The truck will have no effect on revenues, but it is expected to save the firm $17,000 per year in before tax operating costs, mainly labor. The firm's marginal tax rate is 35%.

What will the cash flows for this project be?

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