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i need your assistance with this problem Arkansas Best Freightways is considering a purchase of three different potential trucks, it is considering three different investment
i need your assistance with this problem
Arkansas Best Freightways is considering a purchase of three different potential trucks, it is considering three different investment scenarios and their respective cash flows. Arkansas Best Freightways use a cost of capital of 9 percent to evaluate the investments Cost of Capital 9% Year Year (today) Year Year 2 Year 3 Year 4 Buy new truck Increased profits Increased profits Increased profits Increased profits Investment (85,000) 29,000 25,000 25,000 25,000 Investment 2 (105,008) 20,000 30, 40,000 50,000 Investment 3 (125,000) 40,000 30,000 20,000 10,000 Required: 1. Calculate the net cash flows (not discounted) over the life of the three investments (Negative amounts should be entered using a minus sign.) Investment 1 Investment 2 Investment Net cash flows over life (not discounted) 2. Calculate the net present value for each of the three possible investments, using the 9 percent cost of capital as the interest for discount) rate (Negative amounts should be entered using o minus sign. Round your answer to 2 decimal places. Use the Excel NPVO) function to calculate the net present value for each of the three possible investments.) Investment 1 Investment 2 Investment 3 Not present value (NPV) OK 2 Calculate the net present value for each of the three possible investments, using the 9 percent cost of discount) rate. (Negative amounts should be entered using a minus sign. Round your answer to 2 decir NPVO) function to calculate the net present value for each of the three possible investments.) nces Investment 1 Investment 2 Investment 3 Net present value (NPV) 3. Which investment has the highest net present value (NPV)? The lowest NPV? Highest not present value Lowest net present value Step by Step Solution
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