Cash flow projection for this replacement project

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Reference no: EM131344154

Meade Metals Inc is replacing an old truck with a new one. To make the change Meade will purchase a $200,000 truck that it will depreciate straight-line over ten 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. The old truck was purchased eight years ago for $120,000. It has been depreciated straight line based on a 10-year life and a $17,000 salvage value. The old truck's annual operating expenses are $110,000, and it has a market value of $42,000. Develop a five-year cash flow projection for this replacement project. Meade's tax rate is 40%.

Total Year 5 Cash Flow = $

Reference no: EM131344154

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