+1 862 207 3288 Finance
Project description
Your company is considering the replacement of an old delivery van with a new one that is more efficient. The
old van cost $40,000 when it was purchased 5 years ago. The old van is being depreciated using the simplified
straight-line method over a useful life of 8 years. The old van could be sold today for $7,000. The new van has
an invoice price of $80,000, and it will cost $6,000 to modify the van to carry the company’s products. Cost
savings from use of the new van are expected to be $28,000 per year for 5 years, at which time the van will be
sold for its estimated salvage value of $18,000. The new van will be depreciated using the simplified
straight-line method over its 5-year useful life. The company’s tax rate is 35%. Working capital is expected to
increase by $5,000 at the inception of the project, but this amount will be recaptured at the end of year five. If the
WACC of the company is 10% what is the NPV, the IRR and the discounted Payback Period? Please use
Excel-Sheet to solve this problem.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET AN AMAZING DISCOUNT 🙂
