Laura wants to buy a delivery truck. The truck costs $132,000 and will allow her to increase her after tax profits by $24,000 per year for the next 10 years. She will borrow 80% of the cost of the truck for 10 years, at an interest rate of 6%. Laura's unlevered cost of capital is 17% and her tax rate is 34%. The loan includes a $1,000 application fee. What is the NPV of buying the truck on these terms?

Answer rating: 100% (QA)

a Cash outflow at the beginning Cost of the machine loan received application fee 1320... View the full answer