Case Studies: Trucking Scenarios

To get a real feel for the financial impact of a Like-Kind Exchange (LKE) program, it is best to review the 5-year cash flow benefit for certain volume levels. Every business is unique so each implementation of an LKE program is slightly different; however, these examples should provide a general understanding of the benefits.

Scenario 1: 72 Tractors Sold per Year

ASSUMPTIONS
• Annual Tractor Sales: $1,800,000
• Tax Life: 3 Years
• Average Age at Sale: 5 Years
• Income Tax Rate: 40%
• Exp. Annual Growth: 5%
• Exp. Annual Inflation: 2%

Scenario 2: 350 Tractors Sold per Year

ASSUMPTIONS
• Annual Tractor Sales: $8,750,000
• Tax Life: 3 Years
• Average Age at Sale: 5 Years
• Income Tax Rate: 40%
• Exp. Annual Growth: 5%
• Exp. Annual Inflation: 2%