You run a plumbing company. You are experiencing a growth inyour business, and find you don't have enough trucks and plumbersto meet the demand. You are considering buying a new truck and thenhiring an additional plumber to handle some of the work you havehad to turn away. Based on the assumptions below,prepare a Capital Budgeting Analysis using the template provided.Assume you will sell the truck at the end of year 3.
| Cost of the Truck | $35,000.00 |
| TruckModifications | $4,000.00 |
| Sales Taxon Truck | $2,750.00 |
| Depreciation Method | Straight Line |
| UsefulLife of Truck in Years | 5 |
| Revenues | $100,000.00 |
| PlumberWages | $55,000.00 |
| Gas forTruck | $5,000.00 |
| Insurancefor Truck | $750.00 |
| Maintenance for Truck | $1,200.00 |
| PlumbingSupplies | $5,000.00 |
| SalePrice of Truck | $20,000.00 |
| CompanyTax Rate | 35.00% |
| NPVDiscount Rate | 7.00% |
What is the Capital Investment / Depreciable Basis?
What is the Book Value at the end of Year 2?
What is the Operating Cash Flow for Year 1?
What is the Salvage Value?
What is the Net Present Value (NPV)?
