You have been asked by the president of your company to evaluate the proposed acquisition of a new special purpose truck for $280,000. The truck falls into the MACRS 10-year class, and it will be sold after 10 years for $53,000. 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 $83,000 per year in before tax operating costs, mainly labor. The firm's marginal tax rate is 21 percent. What will the cash flows for this project be during year 3? Multiple Choice $105,890 $74,037 $28,000 $33.717

You have been asked by the president of your company to evaluate the proposed acquisition of a new special purpose truck for $280,000. The truck falls into the MACRS 10-year class, and it will be sold after 10 years for $53,000. 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 $83,000 per year in before tax operating costs, mainly labor. The firm's marginal tax rate is 21 percent. What will the cash flows for this project be during year 3? Multiple Choice $105,890 $74,037 $28,000 $33.717

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Description: You have been asked by the president of your company to evaluate the proposed acquisition of a new special purpose truck for $280,000. The truck falls into theMACRS 10-year class, and it will be sold after 10 years for $53,000. Use of the truck will

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 10P

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