Amazon is on a mission to be net zero carbon by 2040. As part of that endeavor, they are considering using autonomous delivery vehicles which operate on alternative power sources (solar, battery, recycled oil, etc). The autonomous vehicles are expected to cost $100,000 each. Amazon wants to invest in 30 to start. Amazon will pay for 30% of the total cost of the autonomous vehicles outright and borrow the other 70%. The loan is borrowed at 11% for 5 years. Each vehicle is estimated to have a salvage vale of $30,000 after 8 years. The autonomous delivery vehicles are expected to be able to deliver 24/7 and therefore are expected to increase revenue by $50,000 per unit per year and add operating expenses of $10,000 per unit per year. Federal corporate income taxes follow the table below. a) Develop tables using a spreadsheet to determine the ATCF (After Tax Cash Flow) for the 8 years of the AV’s considering all 30 AVs. Negative taxable income is treated a $0 taxable income. a. Using straight line depreciation b. Using MACRS depreciation with the appropriate property class
Amazon is on a mission to be net zero carbon by 2040. As part of that endeavor, they are
considering using autonomous delivery vehicles which operate on alternative power sources
(solar, battery, recycled oil, etc). The autonomous vehicles are expected to cost $100,000 each.
Amazon wants to invest in 30 to start. Amazon will pay for 30% of the total cost of the
autonomous vehicles outright and borrow the other 70%. The loan is borrowed at 11% for 5
years. Each vehicle is estimated to have a salvage vale of $30,000 after 8 years. The autonomous
delivery vehicles are expected to be able to deliver 24/7 and therefore are expected to increase
revenue by $50,000 per unit per year and add operating expenses of $10,000 per unit per year.
Federal corporate income taxes follow the table below.
a) Develop tables using a spreadsheet to determine the ATCF (After Tax
8 years of the AV’s considering all 30 AVs. Negative taxable income is treated a $0 taxable
income.
a. Using straight line
b. Using MACRS depreciation with the appropriate property class
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