Cash Flows for the Project Assignment | Homework For You

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 $4,000 apiece and which you could probably use for another 2 years if you chose not to replace them. The NV vans will cost $39,000 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 $4,700 each. If your cost of capital is 8 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.)
Year FCF S -182,000 References eBook & Resources Worksheet Difficulty: 3 Advanced Check my work. Get Finance homework help today