A company is planning to expand its shipping activities by purchasing a new truck for $40,000. It has to invest an additional $10,000 to do the site preparation for its parking. From this new project, the company expects to increase the annual revenue by $10,000. The truck will be used for 6 years, with a salvage value of $12,000. Use this information to answer the following questions to decide whether the purchase is justified at a MARR of 12%.

Question a:

What is the total initial investment required for this project?

Question b:

What is the present value of this investment? Round to the nearest integer.

Question c:

Would the purchase of the truck be justified?

Yes

No