Capital Budgeting Net Investment by Homework Help Classof1

Capital Budgeting Net Investment

byHomework Help Classof1

Kobo ebook | March 26, 2013

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"(Cash flows and NPV for a new project) Syracuse Roadbuilding Company is considering the purchase of a new tandem box dump truck. The truck costs$95,000, and an additional$5,000 is needed to paint it with the firm logo and install radio equipment. Assume the truck falls into the MACRS three-year class. The truck will generate no additional revenues, but it will reduce cash operating expenses by$35,000 per year. The truck will be sold for$40,000 after its five-year life. An inventory investment of$4,000 is required during the life of the investment. Syracuse Roadbuilding is in the 45% income tax bracket.
a)   What is the net investment?
b)   What is the after-tax net operating cash flow for each of the five years?

Title:Capital Budgeting Net InvestmentFormat:Kobo ebookPublished:March 26, 2013Publisher:Classof1Language:English

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