Depreciated under macrs as five-year property

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A local delivery company has purchased a delivery truck for $25,000. The truck will be depreciated under MACRS as a five-year property. The trucks market value (salvage value) is expected to decrease by $2,900 per year. It is expected that the purchase of the truck will increase its revenue by $20,000 annually. The O&M costs are expected to be $3,000 per year. The firm is in the 40% tax bracket, and its MARR is 14.6%. If the company plans to keep the truck only two years, what is the net present worth?"

Reference no: EM131964412

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