BILBOA

Biboa Freightines, SA, of Panama, has a small truck that it uses for intracity detiveries. The truck is worn out and must be either overheuled or replaced with a new truck. The company has assembied the followind informovion 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 purchased, it will be used for five years, after which it will be traded in on another truck. The new truck would be diesel. operated, resulting in a substantial reduction in annual operating costs, as shown above. The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 9% discount rate lick here to view Exhibit:7B-1 and Exhibit 78-2, to determine the appropriate discount factor(s) using tables, quired: What is the net present value of the "keep the old truck" alternative? What is the net present value of the "purchase the new truck" alternative? Should Biboa Freightlines keep the old truck or purchase the new one