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Biboa Freightines, S A. of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either

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Biboa Freightines, S A. of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either overhouled or replaced with a new truck. The company has assembled the following information: 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 purchosed, it will be used for five years, ofter which it will be traded in on another vuck. The new truck would be diesel-operoted resulting in a substantial reduction in annual operating costs, as shown above. The compony computes depreciotion on a straight-line basis. All investment projects are evoluated using a 14% discount rote Click here to view Exhibit 782 and Exhibit 78.2 , to determine the oppropilate discount factoris) 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 Biboa Frelghtlines keep the old truck or purchase the new one? Complete this question by entering your answers in the tabs below

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