You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $25

Question

3 years ago

6

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $25

0,000. The truck falls into the MACRS three-year class, and it will be sold after three years for $50,000. Use of the truck will require an increase in NWC (spare parts inventory) of $5,000. The truck will have no effect on revenues, but it is expected to save the firm $80,000 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 21 percent. What will the operating cash flow for this project be during year 3

Business

1 answer:

JulijaS [17] · Answer 1 · 2022-04-13T03:11:45+03:00

JulijaS [17]3 years ago

5 0

Answer:

Please find the complete solution in the attachment file.

Explanation:

Please find the attachment table for the 3 years of cash flow: