You have been by the president of your company to evaluate

Reference no: EM13623514

You have been by the president of your company to evaluate the proposed acquisition of a new special purpose truck. Since you are not an expert on industrial vehicles you hire a consulting firm to make recommendations. The consultant charged you $1,500 and recommended the purpose of model CP8 truck. The trucks basic price is $40,000, and it will cost another $10,000 to modify it for special use by your firm. The truck will be depreciated using IRS guidlines that recquire the depretiation expense equal to 33% of the initial depreciable value in year 1, 45% of the initial depreciable value in year 2, and 15% of the initial depreciable value in year 3. The company expectsto sell the new truck after 3 years for $20,000. Use of the truck will recquire an increase in the company's net working capital of $2,000, but this $2,000 may be recovered at the end of year 3. The truck will have no effect on revenues, but is expected to save $25,000 per year in before tax operating cost, mainly labor the firm's marginal tax rate is 40%. What is the initial outlay recquired to fund this project?

Reference no: EM13623514

Questions Cloud

Uinc currently has zero debt ie wd0 it is a zero growth : uinc. currently has zero debt i.e. wd0. it is a zero growth company and additional firm data are shown below. now the

If a two-sided null hypothesis is rejected for a single : if a two-sided null hypothesis is rejected for a single mean at a given significance level the corresponding one-sided

What can the engineer conclude about the manufacturers : an engineer measures the diameter of 20 tubes selected at random from a large shipment. the sample yields a sample mean

Let x and y be independent random variables with uniform : let x and y be independent random variables with uniform density functions on 01. finda. eabsx-yb. emaxxyc. eminxyd.

You have been by the president of your company to evaluate : you have been by the president of your company to evaluate the proposed acquisition of a new special purpose truck.

Cj computer disks stocks and sells recordable cds the : cj computer disks stocks and sells recordable cds. the monthly demand for these cds is closely approximated by a normal

If third charge q3600 nc is now placed at the point x400 cm : a charge q1 5.00 nc is palced at the origin fo an xy-coordinate system and a charge q2 -2.00nc is placed on the

The data show the chest size and weight of several bears : the data show the chest size and weight of several bears. find the regression equation letting the first variable be

What action do you recommend if such a trial sampling of 30 : the setup for grinding a type of bearing is considered under control if the bearings have a mean diameter of 5.000 mm.

User Account

All Pages