Question: final cash flows: Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans, You will be replacing 5 fullydepreciated vans,

Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans, You will be replacing 5 fullydepreciated vans, which you think you can sell for $5,000 a piece and which you could probably use for another 2 years if you chose not to replace them. The NV vans Will cost $49,000 each 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 $5,700 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 neorest dollor omount.) MACRS Depreciation
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
