Computing the Terminal-Year FCF: Miles Cyprus Company Purchased a Truck

Multiple Choice

Computing the terminal-year FCF: Miles Cyprus Company purchased a truck that currently has a book value of $1,000. If the company sells the truck for $5,000 today, then what is the amount of cash that it will net after taxes if the company is subject to a 30 percent company tax rate?

A) $1,200
B) $3,800
C) $4,000
D) $5,000