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1 question with sub questions Bilboa Freightlines SA, of Panama, has a small truck that it uses for intracity deliveries The truck is worn out
1 question with sub questions Bilboa Freightlines SA, of Panama, has a small truck that it uses for intracity deliveries The truck is worn out and must be either overhauled or replaced with a new truck. The company has assembled the following information: Purchase cost new Remaining book value Overhaul needed now Annual cash operating costs Salvage value-now Salvage value-five years fram now $ 37,000 47,000 27,080 26,000 19,580 18,88 10,000 13,600 13,800 If the company keeps and overhauls its present delivery truck, then the truck will be usable for five more years If a new truck is purchased, it will be used for five years, after which it will be traded in on another truck. The new truck would be diesel-operated resulting in a substantial reduction in annual operating costs, as shown above. The company computes depreciation on a straight-line bass All investment projects are evaluated using a 10% discount rate Click here to view Exhibit 138-1 and Exhibit 138.2, to determine the appropriate discount factors) using tables Required: 1 What is the net present value of the 'keep the old truck" alternative? ( 2 What is the net present value of the "purchase the new truck" alternative? 3. Should Bilboa Freightlines keep the old truck or purchase the new one? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the net present value of the "keep the old truck" altenative? (Enter negative amount with a minds sign. Round your final answer to the nearest whole dollar amount.) Net present value
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