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Your company is considering the replacement of an old delivery van with a new one that is more efficient. The old van cost $ 4
Your company is considering the replacement of an old delivery van with a new one that is more efficient. The old van cost $ when it was purchased years ago. The old van is being depreciated using the simplified straightline method over a useful life of years. The old van could be sold today for $ The new van has an invoice price of $ and it will cost $ to modify the van to carry the company's products. Cost savings from use of the new van are expected to be $ per year for years, at which time the van will be sold for its estimated salvage value of $ The new van will be depreciated using the simplified straightline method over its year useful life. The company's tax rate is Working capital is expected to increase by $ at the inception of the project, but this amount will be recaptured at the end of year five. What is the terminal cash flow, to the nearest dollar? The correct answer given is $ how do you get to that number?
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