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problem: Syracuse Road building Company is considering the buy of a new tandem box dump truck. The truck costs 95,000 dollars, & an additional 5,000 dollars is needed to paint it with the firm logo and install radio equipment. Suppose the truck falls into the MACRS 3 year class. The truck will generate no additional revenues, but it will reduce cash operating expenses by 35,000 dollars per year. The truck will be sold for 40,000 dollars after its five-year life. An inventory investment of 4,000 dollar is required during the life of the investment. Syracuse Road building is in the 45 percent income tax bracket.

[A] find out the net investment?
[B] find out the after tax net operating cash flow for each of the 5 years?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M917121

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