You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000. the truck falls into the macrs 3-year class, and it will be sold after three years for $19,200. use of the truck will require an increase in nwc (spare parts inventory) of $1,200. the truck will have no effect on revenues, but it is expected to save the firm $20,600 per year in before-tax operating costs, mainly labor. the firm’s marginal tax rate is 39 percent. what will the cash flows for this project be?

Grant, inc., acquired 30% of south co.’s voting stock for $200,000 on january 2, year 1, and did not elect the fair value option. the price equaled the carrying amount and the fair value of the interest purchased in south’s net assets. grant’s 30% interest in south gave grant the ability to exercise significant influence over south’s operating and financial policies. during year 1, south earned $80,000 and paid dividends of $50,000. south reported earnings of $100,000 for the 6 months ended june 30, year 2, and $200,000 for the year ended december 31, year 2. on july 1, year 2, grant sold half of its stock in south for $150,000 cash. south paid dividends of $60,000 on october 1, year 2. before income taxes, what amount should grant include in its year 1 income statement as a result of the investment?