WF Ltd is considering replacing its old fully depreciated forklift with a new model. Two months ago,
Question:
WF Ltd is considering replacing its old fully depreciated forklift with a new model. Two months ago, WF paid LMO Consulting $11,000 in consulting fees to help them evaluate the various forklifts on offer. Your manager suggests this consulting fee be spread over the life of the project. The cost of the recommended forklift is $51,000. The consultants estimate the old forklift will be able to be sold today for a salvage value of $13,000. In addition, WF has estimated it will need to increase its holdings of inventory from $10,000 to $43,000 at the start of the project. The company tax rate is 30%. What is the total cash flow at the start of the project (report your answer to the nearest dollar)?
Statistics The Art and Science of Learning from Data
ISBN: 978-0321755940
3rd edition
Authors: Alan Agresti, Christine A. Franklin