Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You will be replacing 5 fully- depreciated vans, which you think you can sell for $4,200 a piece and which you could probably use for another 2 years if you chose not to replace them. The NV vans will cost $41,000 ach 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 $4,900 each. If your cost of capital is 10 percent and your firm faces a 21 percent tax rate, what will the cash flows for this project be? (Round your answers to the nearest dollar amount.) Year FCF 0 1 2 3 4 5 6 Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You will be replacing 5 fully- depreciated vans, which you think you can sell for $4,200 a piece and which you could probably use for another 2 years if you chose not to replace them. The NV vans will cost $41,000 ach 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 $4,900 each. If your cost of capital is 10 percent and your firm faces a 21 percent tax rate, what will the cash flows for this project be? (Round your answers to the nearest dollar amount.) Year FCF 0 1 2 3 4 5 6
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
A saving bond earns a variable rate of interest that can change six months, with compounding done monthly. The initial rate was 6.8% in early 2015. If that rate continues unchanged for the 3 years of...
-
A gas mixture contains one-third methane by volume (recall what that means in terms of mole %) and the balance oxygen at 350C and 3.0 bar. Calculate the specific enthalpy of this stream in kJ/kg (not...
-
Determine the normal force, shear force, and moment in the curved rod as a function of . Given: c = 3 d = 4 PA
-
If the equilibrium price of wheat is $3 per bushel and then a price floor of $2.50 per bushel is imposed by the government, a. there will be no effect on the wheat market. b. there will be a shortage...
-
A 10-year, 12% semiannual coupon bond with a par value of $1,000 may be called in 4 years at a call price of $1,060. The bond sells for $1,100. (Assume that the bond has just been issued.) a. What is...
-
Shirley wants to go to the store to buy some potato but she doesn't have a car. She says to Richard "I will pay you a dollar to take me to the store to buy some potato chips." Richard agrees to take...
-
Case-3: Stationery Hut is engaged in the purchase and sale of stationery products. The inventory of the company ranges from carbon pencil to cartridge. It has earned the reputation of delivering high...
-
At a market price of $1.25, a Quantity demanded is exists. Quantity supplied is the price until it reaches equilibrium. Sellers will tend to Price per Apple y $2.00 $1.75 $1.50 $1.25 $1.00 $0.75...
-
Sta. Elena Merchandising Company plans to sell in December 15,000 units of its product at a unit price of P20.The estimated gross profit is 25% of sales.The inventory will be increased in December in...
-
A bistro needs 15# of EP watermelon for tomorrow's service. If the yield percent for watermelon is 68%, how many pounds of watermelon must the restaurant order (assuming none currently in inventory)?...
-
Discuss one revenue cycle risks and the applicable internal control that can be adopted. Explain Discuss three kinds of manufacturing processes and give example of each type.
-
Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases DVDs from Globe at $29.00 per DVD; DVDs are shipped in packages of 65....
-
1. Which of the following is a means of establishing a foothold in foreign markets without large capital outlays? A. Franchising C. Licensing B. Joint venture D. Consortia 2. One of the following...
-
1. Using the information from Problem 16-4B, prepare a statement of cash flows for Lim Garden Supplies Inc. using the direct method of presenting cash flows from operating activities. 2. How does Lim...
-
For effective internal accounting control, the accounts payable department should compare the information on each vendor's invoice with the (a) receiving report and the purchase order. (b) receiving...
-
Which of the following control procedures is not usually performed in the vouchers payable department? (a) Determining the mathematical accuracy of the vendor's invoice. (b) Having an authorized...
-
The mailing of disbursement checks and remittance advices should be controlled by the employee who (a) signed the checks last. (b) approved the vouchers for payment. (c) matched the receiving...
Study smarter with the SolutionInn App