Examine what will the cash flows for the project be

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Question: Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You will be replacing 5 fully-depreciated vans, which you think you can sell for $4,400 apiece and which you could probably use for another 2 years if you chose not to replace them. The NV vans will cost $43,000 each in the configuration you want them, and can be depreciated using MACRS over a 5-year life. Expected yearly before-tax cash savings due to acquiring the new vans amounts to about $5,100 each. If your cost of capital is 12 percent and your firm faces a 35 percent tax rate, what will the cash flows for this project be?

Reference no: EM131958028

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