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answer a Sunland's Auto Care is monsidering the purchase of a new tow truck. The garage doesnt currently have a tow truck, and the 559.960
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Sunland's Auto Care is monsidering the purchase of a new tow truck. The garage doesnt currently have a tow truck, and the 559.960 price tas for a new truck would represent a major expenditure. Suntand Austen, owner of the garage, has compiled the following estimates in tring to determine whether the tow truck should be purchased Sunland s good friend, Rick Ryanstopped by. He is trying to convince Suniand that the tow truck wil have other benefits that Sunland hasnt even considered. First, he says, cars that need towing need to be fixed. Thus, when Suniand tows them to her facility, her repair revenues will increase Second, he notes that the tow truck could have a plow mounted on it, thus saving Sunland the cost of plowing her parkinc lot (Rick will give her a used plow blade for tree if Surland will plow Rick's driveway) Third, he notes that the truck will senerate goodmili pecple who are rescued by Sunland s tow truck will feel grateful and might be more inclined to use her service taticn in the future or buy Eas there Fourth, the tow truck will have" Sunland's Auto Care" onits doors, hood, and back tailgate-a form of Iree sdvertising wherever the low truck noes Rick estimates that at a minimum, these benefits would be worth the following Cakulate the net present value, ignoring the additional benefits described by Rick. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answer to 0 decimal places, e.s. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Netpresentvalue 5 Should the tow truck be purchased? The tow truck be purchased Step by Step Solution
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