Carolina Freight Lines has a small truck 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 data:

	Present truck	New Truck
Purchase cost new	$21,000	$30,000
Remaining book value	11,500
Overhaul needed now	7,000
Annual cash operating costs	10,000	6,500
Salvage value now	9,000
Salvage value five years from now	1,000	4,000

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, and the old truck would be sold for salvage. The new truck would be diesel-operated, resulting in substantial reductions is annual operating costs as shown above.

The company computes depreciation on a straight-line basis, and all investment projects are evaluated using a 15% discount rate.

Question: Should Carolina Freight Lines keep the old truck or purchase the new one? Use net present value analysis in making your decision. Please show the calculations.