Blue Llama Mining is considering an investment that will have the following sales, variable costs, and fixed operating costs:The project will require an initial investment of $$20,000,$ but the project will also be using a company$-$owned truck that is not currently being used.

This truck could be sold for $$12,000,$ after taxes, if the project is rejected. What should Blue Llama Mining do to take this information into account?

The company does not need to do anything with the value of the truck because the truck is a sunk cost.

Increase the NPV of the project by $$12,000.$

Increase the amount of the initial investment by $$12,000.$

This project will require an investment of $$20,000$ in new equipment. The equipment will have no salvage value at the end of the project's four$-$year

life. Blue Llama Mining pays a constant tax rate of $40\%,$ and it has a required rate of return of $11\%.$

When using accelerated depreciation, the project's net present value $($NPV$)$ is

When using straight$-$line depreciation, the project's NPV is

Using the

depreciation method will result in the greater NPV for the project.