The local franchise of Jiffy Lube is thinking of buying a new lift for $40,000 that would

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The local franchise of Jiffy Lube is thinking of buying a new lift for $40,000 that would make it easier to access the oil filter in customers' cars and save labor. The savings would increase over the project's 3-year life, in line with the projected growth of the business:

Year 1 2 3

Costsavings 70,000 77,000 92,400

The machine is to be linearly depreciated to zero and will have no resale value after 3 years.The company uses a discount rate of 12% and has a tax rate of 21%.

What is the free cash flowin year 3?
What is the NPV?

Posted Date: May 17, 2024 08:01 PM

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The local franchise of Jiffy Lube is thinking of buying a new lift for $40,000 that would

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