Question: Spreadsheet Problem: Project Cash Flows Your company is contemplating replacing its current fleet of delivery vehicles with Nissan NV vans. You will be replacing five
Spreadsheet Problem: Project Cash Flows Your company is contemplating replacing its 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 two 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 five-year life, but you are unable to make use of either bonus depreciation or Section 179 expensing. Expected yearly beforetax 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? (LG12-5)
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