Bilboa Freightlines, S.A.. of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be ether overhauled or replaced with a new truck. The company has assembled the following information Purchase cost new Remaining book value Overhaul needed now Annual cash operating costs Salvage valve now Salvage value-five years from now Present New Truck Truck $ 23,000 $ 29,000 $ 11, eee $10,000 $ 12,000 $ 8,500 $ 6,eee $5,000 $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 12% discount rate, Click here to view Exhibit 148.1 and Exhibit 148-2. 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? ERIT 1484 Precent Value of St 29 5 06 Periods 5X 9% 10% 115 12 15% 145 5% 16% 17 9 20% 20 239 245 25% 1 0.962 0.952 0943 0935 0.926 090 0909 0.901 0.893 0.885 0.877 0870 0.862 0.855 0847 0.840 0333 0826 0820 080 0.506 0.800 2 0.925 0907 0990 0.873 0.8570.542 0.826 0.812 0797 0700 0.769 0.756 073 0731 0713 0.706 0.094 0683 0.672 0661 0650 0.640 3 0859 0364 0.340 0.8% 0,704 0720751 0.731 07120690 0,675 0658 0641 0624 0009 0.53 0.579 0564 0.551 0537 0.524 0512 4 0355 0.823 0.792 0.750 0.735 0708 060 0.659 0636 0600592 0.572 0552 0534 0.516 0.499 0482 04670451 0.437 0423 0.410 5 0822 074 077 070 06010650 0621 0.593 0.567 0503 0.519 0497 0.478 0.456 0.07 0.4190402 0.386 0.370 0355 0.3410328 5 07900746 0705 0606 0090 0.596 0564 0.535 0.507 0.400 0.456 0432 0.40 0.390 0.370 0352 0.335 0.319 0.303 0.299 0.275 0252 7 0760 070665 0.623 0583 0.54 0.50 0.402 0452 0425 0.400 0.375 0.354 0.333 0314 0295 0279 0.263 0249 0235 0.222 0.210 3 0731 0.07 0.627 0502 050 0502 0.467 0.434 0404 0.376 0.51 0.327 0.305 0.285 0266 0.249 0.20 0.20 0.2040191 0.119 0168 070006450592 054 0.500 0.400 0.424 0.39 0361 0.2 0.308 0254 0283 020 0225 0.209 019401300367 0.1550144 0134 0.675 0 0556 0.500 0.43 0.422 0.336 0352 0322 0295 0.270 0.2470227 0208 0191 016 0952 0549 0:37 0126 011 0107 11 0050 0555 052 0.475 0429 0.300.350 000 0262 0261 0237 021501950178 0.962 035 01230112 0.1030094 0.055 0.025 0.557 047 046 097 0258 0.19 0.296 0257 0231 0201 017 0188015208370124 0102 0001053004090150368 0.126 0290 02580229 0204 02 0163 0.1020092 008300700000 05510010 0.57 0.505 040 0.30 0.40 0295 020 0232 0205 011 0104 0000 0084 0075 0.00 0.00 0.055 00541 15 0125 011 0099 0.000 0079 0.000 0.062 0058 0.0090044 0.555 004 0.382 0.35 027 020 0209 010 035008001230108 0.005 0.004 GON 0.065 0057 0.051 0045 040 0035 16 0534 050 0300 0292 0252 0210001013 011 0203070090 0.00 0.071 0002 0.054 0000112000600320029 000000003170270 02 0198 0100116 0125010000000000000000000520045 000 000 0000 0026 0021 0.000750 0.20 0.250 020 0100 01510100 7503010027100194 04 003 01 0.095 000 0000 0059 005 004 003 002 0026 0024 0.021 00 20 001 000 000 0000 00510000037003002700200200017 OOH 0056 0.3 0.30 0.250 0.25 17805490040040067 007 0.001 0.001 000 0037003100200022 0.0100010010012 21 000255021 0202099 0005 010 009 007 0064 005 004 000 000 0026 0022 0.00001000100110000 22 0.22 0520270 0226 01540150 00101000000005 004 0000 0020 0022 000 000 000 001 0.000226 0202020 0170 001 012 000 0000 0000 0000 0000 002 0.02200 000 000 000 0000 000 000 0.000000 0.0 0.0 020 017 018 02608020002 0000 000 000 002 0001 0023 000 000 000 000 0000 0.007 0.000000 0 0295 02014 00092 008 009 000 000 000 0034 0030 001 000 000 0000 000 000 000 000 20 00022002 US 0600 005 004200002000000 OOH 001 000 000 000 000 0.00 0.003 030003070 0123 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 20 1 0255 001500190 0000 000 0054 0012 000 000 000 000 000 000 0000 000 000 000 000 000 000 01 03 05 06 7 000 000 000 0000 002 00000011 000 000 0005 00000000000000000 30 0.00271000000 son00320041 000 000 000 000 000 000 000 000 000 000 000 000 0002 0.001 0000000000004600022 00 00 00 0005 004 0000 0000 0000 0000 00000000000000000000 5 NE DHIBIT 140-2 Present Value of an Annuity of S1 in Armart 170 Periods 4 56% 7 8 9% 10% TH 12 3 14% 15% 16 1 15 194 201 215 225 235 245 25% 1 09620952 0943 09350926 0917 0.909 0.901 0.890 OBS 0.877 0.870 0362 0855 0.347 0.840 0.33 0.326 0.820 0.5130306 0800 2 1896 1859 1823 1.800 1783 1759 1736 1690 1668 1647 1626 1605 1505 1556 1547 1520 1509 1492 1474 1457 140 3 2775 2723 2673 2624 2.577 2531 2487 2444 2402 2361 2322 2283 2246 2210 2174 2140 2106 2074 2042 2011 1901 1952 4 3630 546 3465 3.387 3312 3.240 3.00 3102 3.037 29742.914 2.855 2.798 2743 2690 2609 2599 2540 2494 2448 2404 2.362 5 4452 43294212 4900 39933.890 3.791 3.696 3605 3.517 3.433 3352 3.274 3199 31273058 2991 2926 2864 2803 2745 2689 5 5.2425.0764907 1.767 46234436 4.355 4221 411 3.990 389 3784 36853509 3498 3.40 3.326 3.245 3167 3092 3020 2.951 3 6.0025716 552 5.3095206 5083 4368 4712 4564 4423 4260 430 4039 1922 192 37063605 358 3.416 332 1242 2101 6733 8.463 6.210 597 577 5535 5335 54 496 4.799 4.639 4407 43444207 4073954 3.837 3726 3.619 3.5103421 3129 9 7235 7105 6.0020515 6.247 5.995 5759 5537 5328 5132 49464772 4607 4451 43034163 40912.905 1736 16733566343 10 IT 2722 7360 7024 6710 6418 6545 5.009 5650 5.426 5.216 5019 4833 4659 4494 433945924054 3.923 3.7991682 3.571 11 1.700 306787 7490 709 6903 6.495 6.207 5.928 5607 5.453 5.234 502948364656 436 4327 47 40351902776 3656 9.385 38631364 2943 75367901 6.846492 61045.048 5660 5.421 5197 1988 4791011 94274 1905 35725 9.900 994 153 350 7904 7487 7100 6.750 604 61225.8425503 5.342 51104910 4715 4530 02 203 4053 1912 2730 16 105539390 9.295 824 7790 73676902 662 6.302 6.002 57245400 5229 5.000 402 401 402 4265 400 1962 3:04 10.1097 9.00 85508061 7.6067191 6.0 6.462 6142 550 5.525594509240784675 409 4.3154153 4001 3.850 16 11652 308309000 94 8051 702473790974 0004 6.265 595 5.660 5405 5.62 493 4730 456 457 4109 403 10 12 12.506 1134 1077973 0122 11544 3022750) 2120 6729 6.373 607 5700 5.45 5222 490019754570421040501010 2016090.028100500372 1.750 201 7700 7250 6.40 6.4576020 505534 5.273303310600419 4202000 1020 13 04 2005 7150 10.30 9.504 .050 365 7800 736 6.0 6.50 6.100 372 5.504 530 5000 as 104234007 7912 20 240211470 105409120 1514796311097025 6623 6250 59295625535530100657446042794 1954 20 14099120219749000 100179292649 077562 7102 66076.32 503 5005 504527 404040420221 1451013 2012 2900 10.2014 1772 176764570 20 30 6011 5.665.000 490010448 30000 1970 23 140 1140012300 112723500 O 0206 77 7230 6.792 696045720 5.4023167 4525 4700 400 40 3970 24 152070 2550 11.00 10.5209702 9048 2704 7289605 604 607374655124937001507 2901 56222) 1105490675 123 007 422 734 733068728060075766467519542472145144549 1005 0003 T20 100100929 001 79072 600 6491 575410 5201 721 4520 437 435 3306302 190295 027 9212 5700 7409 0.955 054 010579054925215961734252443524154 190 20 6346 3070270047441 69604652 5.0 5502 523 4.92027 452043354957 00441520 150 190 0.70 650 2022 7470 0903 6551 5820 5510 5229 475 473 454 455 1994 3992 30 292 152 026 0274627630Y7000 5600172 5.829 552 523519746 430 230 100 25 15046299924107797199602476470 0126225 55 55 99 1760 186 1-99 DICO