Chapter $9$: Post$-$AssessmentPlease answer questions $1-7$ based on the following information: You have been asked by the president of your company to evaluate the proposed acquisition of a new special$-$purpose truck. The trucks basic price is $$40,000,$ and it will cost another $$5,000$ to modify it for special use by your firm. The truck falls in the MACRS $3-$year class, and it will be sold after three years for $$6,000.$ The applicable depreciation rates are $33\%,45\%,15\%,$ and $7\%.$ Use of the truck will require an increase in net operating working capital $($spare parts inventory$)$ of $$1,500.$ The truck will have no effect on revenues, but it is expected to save the firm $$10,000$ per year in before$-$tax operating costs, mainly labor. The firms marginal tax rate is $40\%$

$\mathrm{.}1.$ What is CFFA at year $0?$

a$.-$$$48,500$b$.-$$$46,500$c$.-$$$47,000$d$.-$$$50,000$

$2.$ What is depreciation at year $2?$a$.$ $$20,250$b$.$ $$19,800$c$.$ $$27,000$d$.$ $$18,400$

$3.$ What is CFFA at year $2?$a$.$ $$10,000$b$.$ $$13,220$c$.$ $$14,100$d$.$ $$22,800$

$4.$ What is deprecation tax shield benefit at year $1?$a$.$ $$9,800$b$.$ $$7,920$c$.$ $$6,820$d$.$ $$5,940$

$5.$ What is after$-$tax cost saving at year $1?$ a$.$ $ $6,000$ b$.$ $$10,000$ c$.$ $$12,000$ d$.$ $ $8,000$

$6.$ What is the tax on salvage value? a$.$ $$2,500$ b$.$ $$1,450$ c$.$ $$1,140$ d$.$ $$6,000$

$7.$ What is CFFA at year $3?$ a$.$ $$15,680$ b$.$ $$15,060$ c$.$ $$16,280$ d$.$ $$15,600$

$8.$ Andrea is analyzing a proposed project to determine how changes in the variable costs per unit would affect the project's net present value. What type of analysis is Andrea conducting? a$.$ Benefit$-$Cost analysis b$.$ Erosion analysis c$.$ Scenario analysis d$.$ Sensitivity analysis