A firm purchases a new truck for $30,000. It will be depreciated over 5 years at $6,000 per year. If the tax rate is 30% what is the time 0 cash flow?

Name: A firm purchases a new truck for $30,000. It will be depreciated over 5 years at $6,000 per year. If the tax rate is 30% what is the time 0 cash flow?
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Question

Quizplus · Accepted Answer

The time 0 cash flow is the initial cost of the truck, which is $30,000, without considering depreciation or tax effects at the moment of purchase.

A Firm Purchases a New Truck for $30,000