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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

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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: Present New Truck Purchase cost new Remaining book value Overhaul needed now Annual cash operating costs alvage value-now Salvage value-five years from now Truck s 25,80e 31,808 $ 12,80e $ 8,808 $13,808 18,5e8 $ 6,808 $ 5,808 6,808 lf the company keeps and overhauls its present delivery truck, then the truck will be usable for five more years. lf 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 14% discount rate. Requlrec 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

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