A new delivery truck costs $35,000. The new delivery truck will improve revenue by $6,000 and

decrease costs by $3,000 per year for 5 years. The tax rate is zero. At the end of 5 years, the truck

will be worn out. It will cost you $2,000 at year 5 to recycle your truck. If the required rate of return

is 8% APR compounded annually, should you buy this new truck?

a) Yes, the cash flows are $45,000 which exceed the investment of $35,000

b) Yes, there is a positive NPV

c) Not enough information to decide

d) No, the NPV is -$427