Problem 12.17 – Sorensen Supplies Company


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Difficulty – Hard

Given a table of annual after-tax cash flows and abandonment values, you are asked to figure out the optimal economic life of the truck.

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  • Search Terms: a. $, $, $,; %. ear ($,) (salvage , , -year a abandonment addition adjustments) after after-tax and and/or annual are cash company company’s costs depreciation, economic end expected explain. firm flow flows, flows, ever for generate given has here. if in including introduction irr is is the it its life. life; life? b. new new delivery not, npv of operate operating optimal option per physical project? purchased recently reduce should sorensen supplies tax the to truck truck. truck’s until value values values, wacc what would year-end year. —
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