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Evaluating a potential purchase of several light-duty trucks

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You are evaluating a potential purchase of several light-duty trucks. The initial cost of the trucks will be $233,000. The trucks fall in the MACRS 5-year class that allows depreciation of 20% the first year, 32% the second year, 19% the third year, 12% the fourth year, 11% the fifth year, and 6% the sixth year. You expect to sell the trucks for 32,600 at the end of five years. The expected revenue associated with the trucks is $171,000 per year with annual operating costs of $79,000. The firm's marginal tax rate is 45.0%. What is the after-tax operating cash flow for year 4?

Reference no: EM133113408

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