Contemplating replacing current fleet of delivery vehicles
Course:- Financial Management
Reference No.:- EM13942986

Assignment Help
Assignment Help >> Financial Management

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 $3,800 apiece and which you could probably use for another 2 years if you chose not to replace them. The NV vans will cost $37,000 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 $4,500 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? (Round your answers to the nearest dollar amount.)

FCF= Year 0 $-172,650.00

FCF= Year 1 $

FCF= Year 2 $

FCF= Year 3 $

FCF= Year 4 $

FCF= Year 5 $

FCF= Year 6 $

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Ocho Inc. announced today it will grow its dividend by 25% for the next 4 years and then will continue indefinitely at 3.5% thereafter. Ocho just paid a dividend today of $1.
Suppose IBM would like to borrow fixed-rate yen, whereas Korea Development Bank (KDB) would like to borrow floating-rate dollars. IBM can borrow fixed-rate yen at 4.75% or flo
A firm requires an investment of $18,000 and will return $25,000 after one year. If the firm borrows $10,000 at 6%, what is the return on levered equity? A firm requires an in
A company is considering buying a machine that would give a net cost savings of $70,000 per year for 10 years. The cost of the machine is $325,000. The company's weighted aver
BSBFIM501 - Provide a sound and reliable source of product at an economical price for use in the café and catering parts of the business - contact for issues and changes to pr
Assume the firm has $104,642 (000) debt outstanding, and there is $210,000 (000) in surplus cash. If the firm has 20.75 million shares outstanding, What is the maximum per sha
Cyclone Software Co. is trying to establish its optimal capital structure. Its current capital structure consists of 40% debt and 60% equity; however, the CEO believes the fir
Suppose that a trader sells 10,000 European call options. How many shares of the stock are needed to hedge the position for the first and second three-month period? For the se