What is time cash flow resulting from proposed acquisition

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Reference no: EM131585112

GeoExpress is considering the purchase of a used truck for its delivery business in order to serve a new geographical area. Investment in the truck includes the purchase price $8,980 and an additional $1,400 for shelving and other modifications to get the truck ready for service - these expenditures will be capitalized in Year 0. They will not be expensed until the first year after their purchase and installation. GeoExpress has already paid $22 for a CARFAX report to ensure the truck had not been in any accidents. Startup advertising expense will be $1,339 and acquisition of the truck will result in $571 of additional inventory and $432 of accounts payableboth the advertising and the working capital changes will be incurred in Year 0. GeoExpress has a tax rate of 36%.

What is the Time 0 (initial) cash flow resulting from the proposed acquisition?

Reference no: EM131585112

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