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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 $230,000. The truck
You have been asked by the president of your company to evaluate the proposed acquisition of a new special purpose truck for $230,000. The truck falls into the MACRS 5-year class, and it will be sold after 5 years for $23,000. Use of the truck will require an increase in NWC (spare parts inventory) of $5,300. The truck will have no effect on revenues, but it is expected to save the firm $101,000 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 21 percent. What will the operating cash flows for this project be during year 2? Multiple Choice 13 $95,700 O $27,400 $95,246 $153,390
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