The companys tax rate is 35 working captial is expected to


Your company is considering the replacement of an old delivery van with a new one that is more efficient The old van cost $30,000 when it was purchased 5 years ago The old van is being depreiciated using the simplified straight-line method over useful life of 10 years The old van could be sold today for $5,000 The new van has an invoice price of $75,000 and it will cost $5,000 to modify the van to carry company's products. Cost savings from the use of the new van are expected to be $22,000 pere year for 5 years at which time the van will be sold for its estimated salvage value.The new van will be depreciated using the simplified straight method of 5 year useful life. The company's tax rate is 35% Working captial is expected to increase by $3,000 at the inception of the project but this amount will be recaptured at the end of year five. What is the incremental free cash flow for year one?

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Finance Basics: The companys tax rate is 35 working captial is expected to
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