Use the model you created in Activity 6.3 (This activity added taxes and depreciation to your model from Activity 3.3) to address the following: Your company may buy a used pick-up for $15,000. During the truck's five year useful life, it is estimated the firm will save $4,000 per year after all of the costs of owning and operating the truck have been paid. The truck's salvage value is estimated to be $3,000. Assume straight line depreciation and a tax rate of 35%. Assume r of 10%. Create a model that will calculate before-tax and after-tax cash flows. Perform the same analysis on another tab of your spreadsheet using a tax rate of 39%.

Activity 6.3

Net Annual Cash Flow	Annual Cost	Year 3 Overhaual	Year 6 Clean up Cost	Salvage Value	Depreciation	Equipment sold for	Tax Rate	Discount Rate	Profit Before Taxes	Tax	Profit After Taxes	Profit After Tax Cash Flows	Net Present Value NPV Total
								0.1	$0	$0	$0	($100,000)	($100,000)
$81,155	$20,000				$16,667		0.35	0.1	$44,488	$15,571	$28,917	$45,584	$41,440
$61,155	$20,000				$16,667		0.35	0.1	$24,488	$8,571	$15,917	$32,584	$26,929
$61,155	$20,000	($15,390)			$16,667		0.35	0.1	$9,098	$3,184	$5,914	$22,581	$16,965
$61,155	$20,000				$16,667		0.35	0.1	$24,488	$8,571	$15,917	$32,584	$22,255
$61,155	$20,000				$16,667		0.35	0.1	$24,488	$8,571	$15,917	$32,584	$20,232
$61,155	$20,000		($17,690)	$10,000	$16,667	$20,000	0.35	0.1	$24,488	$8,571	$15,917	$32,584	$18,393
													$46,215
			The chart shows the cash flow in thousands as it pertains to the information taken from the 6.3 assignment.