edugen wie TE bo nu ule *Exercise 13.14 a-b Dobbs Corporation is considering purchasing a new delivery truck. The truck has many advantages over the company's he current truck (not the least of which is that it runs). The new truck would cost $56,327. Because of the increased capacity, reduced maintenance costs, and increased fuel economy, the new truck is expected to generate cost savings of $7,900. At the end of eight years, the company will sell the truck for an estimated $28,100. Traditionally, the company he has used a general rule that it should not accept a proposal unless it has a payback period that is less than 50% of the asset's estimated useful life. Pavel Chepelev, a new manager, has suggested that the company should not rely only on pre the payback approach but should also use the net present value method when evaluating new projects. The company's cost of capital is 8%. ENK Calculate the cash payback period and net present value of the proposed Investment. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round cash payback period to 2 decimal place, e.g. 12.51. For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and net present value to o decimal places, e.g. 5,275.) Click here to view PV table. es th pre Cash payback period years as it Net present value Does the project meet the company's cash payback criteria? pra The project cash payback criteria. INK Does it meet the net present value criteria for acceptance? The project net present value criteria. Question Attempts: 0 of 3 used