Bilboa Freightlines, 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 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 $6\%$ discount rate.$$Click here to view$$Exhibit $12$B$-1$and$$Exhibit

$12$B$-2,$ 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?