Question
Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You will be replacing five fully-depreciated vans, which you think
Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You will be replacing five fully-depreciated vans, which you think you can sell for $3,000 each and which you could probably use for another 2 years if you chose not to replace them. The NV vans will cost $29,850 each in the configuration you want them, and can be depreciated using MACRS over a 5-year life, but you are unable to make use of either bonus depreciation or Section 179 expensing. Expected yearly before-tax cash savings due to acquiring the new vans amounts to about $3,700 each. If your cost of capital is 8 percent and your firm faces a 21 percent tax rate, what will the cash flows for this project be? Note: Round your answers to the nearest dollar amount.
year 0 1 2 3 4 5
FCF
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