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: Purchase cost new Remaining book value Overhaul needed now Salvage value-now Annual cash operating costs Salvage value-five years from now Present Truck $ 24,000 New Truck $ 27,000 $ 8,000 $ 7,000 $11,000) $ 3,000 $ 2,000 $ 6,000 $ 5,000 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 18% discount rate. Click here to view Exhibit 148-1 and Exhibit 14B-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. Required 1 Required 2 Required 3 What is the net present value of the "keep the old truck" alternative? (Enter negative amount with a minus sign. Round your 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. Required 1 Required 2 Required 3 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.) Net present value 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. Required 1 Required Required 3 What is the net present value of the "purchase the new truck" alternative? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) Net present value EXHIBIT 148-1 Present Value of $1; I (1+r) Periods 4% 5% 1 0.962 0.952 2 0.925 0.907 6% 0.943 0.935 0.890 0.873 7% 3 4 5 0.822 0.784 6 7 8 0.731 9 10. 11 12 13 14 0.577 0.505 0.442 0.388 0.340 15 16 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.394 0.339 0.292 0.252 0.218 0.534 0.458 0.141 17 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.108 18 0.494 0416 0.350. 0.296 0.250 0.212 0.180 0.153 0.130 0.111 0.095 19 0.475 0.396 0.331 0.277 0.232 20 0.456 0377 0.312 21 0.439 0.359 22 23 0.422 0406 0.211 0.112 0.101 0.091 24 0.082 0.043 25 26 27 0.347 0.268 28 0.333 0.255 0.196 0.150 29 0.321 0.243 30 0.308 0.231 0.174 0.131 0.099 0.075 40 0.208 0.142 0.097 0.067 0.046 0.032 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0.683 0.672 0.661 0.650 0.640 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0512 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 | 0.534 | 0.516 0.499 0.482 0.467 0451 0437 0423 0.410 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0419 | 0.402 0.386 0.370 0.355 0.341 0.328 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.410 0.390 0.370 0.352 0.335 0.319 0.303 0.289 0.275 0.262 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.263 0.249 0.235 0.222 0210 0.677 0.627 0.582 0.540 | 0.502 | 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.218 0.204 0.191 | 0.179 0.168 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134 0.676 0.614 0.558 0.508 0.463 0422 0.386 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.149 0.137 0.126 0.116 0.107 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0.112 0.103 0.094 0.085 0.625 0.557 0.497 0.444 0.397 0.356 0319 0.286 0.257 0.231 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.102 0.092 0.083 0.076 0.069 0.601 0.530 0.469 0415 0.368 0.326 0.290 0.258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0.075 0.068 0.061 0.055 0.299 0.263 0.232 | 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.069 0.062 0.055 0.049 0.044 0.209 0.183 0.160 0.045 0.040 0.035 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.057 0.051 0.071 0.188 0.163 0.123 0.107 0.093 0.081 0.062 0.054 0.047 0.042 0.036 0.032 0.028 0.039 0.093 0.080 0.069 0.060 0.052 | 0.045 0.044 0.038 0.081 0.069 0.059 0.051 0.060 0.051 0.043 0.037 0.031 0.116 0.098 0.083 0.194 0.164 0.138 0.070 0.043 0.037 0.031 0.026 0.258 0.104 0.215 0.178 0.149 0.124 0.087 0.073 0.061 0.051 0.093 0.077 0.064 0.053 0.026 0.022 0.294 0.242 0.199 0.164 0.135 0.044 0.037 0.031 0.038 0.068 0.018 0.032 0.026 0.022 0.056 0.046 0.015 0.013 0.011 0.083 0.342 0.278 0.226 0.184 0.150 0.123 0.015 0.012 0.010 0.009 0.049 0.040 0.033 0.027 0.022 0.018 0.074 0.060 0.326 0.170 0.138 0.112 0.262 0.028 0.015 0.013 0.035 0.023 0.019 0.066 0.053 0.010 0.008 0.007 0.006 0.390 0310 0.247 0.197 0.158 0.126 0.102 0.020 0.016 0.013 0.007 0.006 0.005 0.030 0.024 0.010 0.009 0.038 0.375 0.295 0.146 0.116 0.092 0.074 0.059 0.047 0.233 0.184 0.026 0.009 0.021 0.007 0.004 0.003 0.017 0.014 0.011 0.006 0.005 0.066 0.053 0.042 0.033 0.361 0.281 0.220 0.084 0.172 0.135 0.106 0.004 0.003 0.002 0.207 0.161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0.011 0.009 0.007 0.006 0.005 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 0.037 0.063 0.048 0.029 0.022 0.017 0.014 0.011 0.185 0.141 0.107 0.082 0.002 0.001 0.003 0.003 0.002 0.015 0.012 0.009 0.007 0.005 0.004 0.033 0.026 0.020 0.057 0.044 0.000 0.000 0.000 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.022 0.015 0.011 0.034 0.030 0.026 0.023 0.032 0.028 0.024 0.021 0.018 0.027 0.023 0.020 0.017 0.014 0.022 0.019 0.016 0.014 0.012 0.018 0.015 0.013 0.011 0.009 0.009 0.007 0.007 0.006 0.005 0.004 resent Value of an Annuity of $1 in Arrears; 1 1- (1+r)" Periods 4% 5% 6% 7% 8% 11% 1 0.962 0.952 0.943 2 1.886 1.859 1.833 3 2.775 2.723 2.673 4 3.630 3.546 3.465 5 4.452 4.329 4.212 6 5.242 5.076 4.917 4.767 4.623 7 6.002 5.786 5.582 5.389 5.206 8 6.733 6.463 6.210 5.971 5.747 9 7.435 7.108 6.802 6.515 6.247 5.995 10 8.111 7.722 7.360 7.024 6.710 11 8.760 8.306 7.887 7.499 | 7.139 12 9.385 8.863 8.384 7.943 13 9.986 9.394 8.853 8.358 14 10.563 9.899 9.295 8.745 15 11.118 10.380 9.712 9.108 6.418 6.805 7.536 | 7.161 7.904 7.487 8.244 7.786 8.559 8.061 16 11.652 10.838 10.106 9447 8.851 8.313 17 12.166 11.274 10.477 9.763 9.122 8.544 18 8.756 19 8.950 20 21 22 23 24 25 26- 27 28 29 8.694 30 8.951 40 9% 10% 12% 13% 14% 15% 16% 0.935 0.926 0.917 17% 18% 19% 20% 21% 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 1.808 1.783 1.759 1.736 1.713 1.690 1.668 1.647 1.626 1.605 1.585 1566 1.547 1.528 1.509 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 2.074 | 3.387 3.3121 3.240 3.170 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589 2.540 2.494 2.448 2.404 2.362 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3.058 2.991 2.926 2.864 2.803 2.745 2.689 4.486 4.355 4.231 4.111 3.998 3.889 3.784 3.685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 5.033 3.020 2.951 4.868 4.712 4.564 4.423 4.288 4.160 4.039 3.922 3.812 3.706 3.605 3.508 5.535 3.416 3.327 3.242 3.161 5.335 5.146 4.968 4.799 4.639 4.487 4.344 4.207 4.078 3.954 3.837 3.726 3.619 3518 3421 3.329 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3.463 6.145 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 4.054 3.923 3.799 3,682 3571 6.495 6.207 5.938 5.687 5.453 5.234 5.029 4.836 4.656 4.486 4.327 4.177 4.035 3.902 3.776 3.656 6.814 6492 6.194 5918 5.660 5.421 5.197 4.988 4,793 4.611 4.439 4.278 4.127 3.985 3.851 3.725 7.103 6.750 6.424 6.122 5.842 5.583 5.342 5.118 4.910 4.715 4.533 4.362 4.203 4.053 3912 3.780 7.367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008 4.802 4.611 4432 4.265 4.108 3.962 3.824 7.606 7.191 6.811 6.462 6.142 5.847 5575 5.324 5.092 4.876 4.675 4489 4315 4.153 4.001 3.859 7.824 7.379 6.974 6.604 6.265 5.954 5.668 5.405 5.162 4.938 4.730 4.536 4.357 4.189 4.033 3.887 8.022 7.549 7.120 6.729 6.373 6.047 5.749 5.475 5.222 4.990 4,775 4.576 4.391 4.219 4.059 3910 12.659 11.690 10.828 10.059 9.372 8.201 7.702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5.033 4.812 4.608 4.419 4.243 4.080 3.928 13.134 12.085 11.158 10.336 9.604 8.365 7.839 7.366 6.938 6.550 6.198 5.877 5.584 5.316 5.070 4.843 4.635 4442 4.263 4.097 3.942 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7.469 7.025 6.623 6.259 5.929 5.628 5.353 | 5.101 4.870 4.657 4460 4.279 | 4.110 3.954 14.029 12.821 11.764 10.836 10.017 9.292 8.649 8.075 7.562 | 7.102 6.687 6.312 5.973 5.665 5.384 5.127 4.891 4.675 4.476 4.292 4.121 3.963 14.451 13.163 12.042 11.061 10.201 9.442 8.772 8.176 7.645 7.170 6.743 6.359 6.011 5.696 5.410 5.149 4.909 4.690 4.488 4.302 4.130 3.970 14.857 13.489 12.303 11 272 10.371 9.580 8.883 8.266 7.718 7.230 6.792 6.399 6.044 5.723 5432 5.167 4.925 4.703 4499 4311 4.137 3.976 15.247 13.799 12.550 11 469 10.529 9.707 8.985 8.348 7.784 7.283 6.835 6434 6.073 5.746 5.451 5.182 4.937 4.713 4.507 4.318 4.143 3.981 15.622 14.094 12.783 11.654 10.675 9.823 9.077 8422 7843 7.330 6.873 6.464 6097 5.766 5.467 5.195 4.948 4.721 4.514 4.323 4.147 3.985 15.983 14.375 13.003 11.826 10.810 9.929 6491 9.161 8.488 7.896 7.372 6.906 6.118 5.783 5.480 5.206 4.956 4.728 4.520 4.328 4.151 4.734 4.524 4.332 4.154 3.990 16.330 14.643 13.211 11.987 10.935 10.027 9.237 8.548 7.943 7.409 6.935 6514 6.136 5.798 5492 5.215 4.964 6.961 6.534 6.152 5.810 5.502 5.223 4.970 4.739 4.528 4.335 4.157 3.992 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.984 7441 8.650 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.022 7.470 6.983 6.551 6.166 5.820 5510 5.229 4.975 4.743 4531 4.337 4.159 3.994 8.055 7.496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 4.534 4.339 4.160 3.995 17.292 15.372 13.765 12.409 11.258 10.274 9427 3.999 7.105 8.244 7.634 6.642 6.233 5.871 5.548 5.258 4.997 4.760 4.544 4.347 4.166 19.793 17.159 15.046 13.332 11.925 10.757 9.779 22% 23% 0.820 0.813 0.806 0.800 24% 25% 1.492 1.474 1.457 1440 2.042 2.011 1.981 1952 3.988