To make the change mead will purchase a 200000 trick that

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Reference no: EM13572890

Meade Metals Inc. plans to start doing its own deliveries instead of using an outside service for which it has been paying $150,000 per year. To make the change, Mead will purchase a $200,000 trick that will depreciate straight line over 10 years to a $40,000 salvage value. Annual operating expenses are estimated at $80,000, including insurance, fuel, and maintenance on the truck, as well as the cost of a driver. Management plans to sell the truck after five years for $100,000. Develop the projects five year cash flows. Meade's tax rate is 40%.

Reference no: EM13572890

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