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Brenda's Pet Shop is considering the purchase of a new delivery van. Brenda Smith, owner of the shop, has compiled the following estimates in trying
Brenda's Pet Shop is considering the purchase of a new delivery van. Brenda Smith, owner of the shop, has compiled the following estimates in trying to determine whether the delivery van should be purchased: Brenda's assistant manager is trying to convince Brenda that the van has other benefits that she hasn't considered in the initial estimates. These additional benefits, including the free advertising the store's name painted on the van's doors will provide, are expected to increase net cash flows by $530 each year. Click here to view PV tables. (a) Calculate the net present value of the van, based on the initial estimates. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 0 decimal places, e.g. 5,275.) Net present value $ Should the van be purchased? Van be purchased. Calculate the net present value, incorporating the additional benefits suggested by the assistant manager. (Round answer to the nearest whole dollar, e.g. 5,275.) Net present value $ Should the van be purchased? Van be purchased. Determine how much the additional benefits would have to be worth in order for the van to be purchased. Additional benefits would need to have a total present value of at least $
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