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 $20,600 Use of the truck will require an increase in NWC (spare parts inventory) of $2,600 The truck will have no effect on revenues, but it is expected to save the firm $20,200 per year in before tax operating costs, mainly labor The firms marginal tax rate is 34 percent What will the cash flows for this project be

Question

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 $20,600  Use of the truck will require an increase in NWC (spare parts inventory) of $2,600  The truck will have no effect on revenues, but it is expected to save the firm $20,200 per year in before tax operating costs, mainly labor  The firms marginal tax rate is 34 percent  What will the cash flows for this project be

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Question

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

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