subject
Business, 27.12.2020 15:30 anatomyfl

The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is 8 percent. Year Annual After-Tax Cash Flow Abandonment Value
0 $-22,500 -
1 6,250 $17,500
2 6,250 14,000
3 6,250 11,000
4 6,250 5,000
5 6,250 0

Required:
a. What is the truck's optimal economic life?
b. Would the introduction of abandonment values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project?

ansver
Answers: 3

Another question on Business

question
Business, 21.06.2019 21:50
The next dividend payment by savitz, inc., will be $2.08 per share. the dividends are anticipated to maintain a growth rate of 6 percent forever. if the stock currently sells for $42 per share, what is the required return?
Answers: 2
question
Business, 22.06.2019 17:30
You should do all of the following before a job interview except
Answers: 2
question
Business, 23.06.2019 00:30
Kim davis is in the 40 percent personal tax bracket. she is considering investing in hca(taxable) bonds that carry a 12 percent interest rate. what is her after- tax yield(interest rate) on the bonds?
Answers: 1
question
Business, 23.06.2019 01:30
Jodie lives in a developing nation where the local markets are underdeveloped in terms of domestic exposure. her country wants to boost these domestic industries in the face of heavy competition from foreign players in the market. which trade practice should jodie’s country adopt to shield its domestic industries from foreign players? jodie’s country should adopt to shield its domestic industries from foreign players. typing answer
Answers: 1
You know the right answer?
The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, a...
Questions
question
Social Studies, 01.08.2019 20:10
question
Biology, 01.08.2019 20:10
Questions on the website: 13722367