Bilboa Freightilines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either overhauled or replaced with a new truck. The company has assembled the following information: If the company keeps and overhauls its present deiivery 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 18% discount rate. Click here to view Exhibit 128-4 and Exhibit 128-2, to determine the appropriate discount factor(s) 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 Bilboa Freightlines keep the old truck or purchase the new one? Complete this question by entering your answers in the tabs below. What is the net present value of the "keep the old truck" alternative? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) What is the net present value of the "purchase your final answer to the nearest whole dollar an Dertick Iverson is a divisional manager for Holston Company. His annual pay ralses are largely determined by his division's return on investment (RO), which has been above 20% each of the last three years, Derrick is considering a capital budgeting project that would require a $4,480,000 investment in equipment with a useful life of five years and no salvage value. Holston Company's discount rate is 18\%. The project would provide net operating income each year for five years as follows: Click here to view Exhibit 1281 and Exhibit128:2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Compute the project's net present volue. (Round your final answer to the nearest whole dollar amouint.) \begin{tabular}{|l|l|} \hline Simple rate of return & \\ \hline \end{tabular} xaum 128-1 Fvasurt inL