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Ajax Rentals has an opportunity to purchase a truck for $130,000 with a useful life of 5 years and a $20,000 salvage value. $4,000 of
Ajax Rentals has an opportunity to purchase a truck for $130,000 with a useful life of 5 years and a $20,000 salvage value. $4,000 of spare parts is needed when the truck is acquired and this cost will be recovered at the end of the truck's useful life. After two years a $25,000 major overhaul is needed. They can generate $75,000 a year in delivery revenues, and cash operating expenses will be $35,000 a year. Cost of Capital is 8%. What is the Present Value of Cash Inflows (include ALL inflows)?
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