A new delivery truck can be purchased for $30,000. The old one could be sold today for $5,000, and has a book value of $3,000. In three years, the old truck will have a salvage value of $1,000 (and no book value). The new truck would be depreciated on a 5 year MACRS schedule. The firm’s tax rate is 21%. If the old truck is sold and the new one bought, and the new truck will save the firm $1,000 a year in gas expenses, and assuming the new truck would have a salvage value of $10,000 in year 3, what is the replacement project's NPV if the firm’s WACC is 15%? (Round to the nearest dollar and do not enter a dollar sign)
A new delivery truck can be purchased for $30,000. The old one could be sold today for $5,000, and has a book value of $3,000. In three years, the old truck will have a salvage value of $1,000 (and no book value). The new truck would be depreciated on a 5 year MACRS schedule. The firm’s tax rate is 21%. If the old truck is sold and the new one bought, and the new truck will save the firm $1,000 a year in gas expenses, and assuming the new truck would have a salvage value of $10,000 in year 3, what is the replacement project's NPV if the firm’s WACC is 15%? (Round to the nearest dollar and do not enter a dollar sign)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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A new delivery truck can be purchased for $30,000. The old one could be sold today for $5,000, and has a book value of $3,000. In three years, the old truck will have a salvage value of $1,000 (and no book value). The new truck would be depreciated on a 5 year MACRS schedule. The firm’s tax rate is 21%.
If the old truck is sold and the new one bought, and the new truck will save the firm $1,000 a year in gas expenses, and assuming the new truck would have a salvage value of $10,000 in year 3, what is the replacement project's
(Round to the nearest dollar and do not enter a dollar sign)
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