Bob Heavy Tools is considering the acquisition of a light truck, in order to expand the...

Bob Heavy Tools is considering the acquisition of a light truck, in order to expand the business to other geographical areas. If he can expand to other areas, additional business will represents an increase in Earnings before depreciation and taxes of $60,000 annually during the first 3 years and $25,000 annually in the last 3 years. Bob’s cost of capital is 12% and is in the 32% marginal tax rate. If the light truck cost is $160,000, What is the net present value?

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jeff jeffy answered 1 year ago

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