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Iota Logistics is considering purchasing new delivery trucks. The cost of the trucks is $80,000, and the expected annual cash inflows are as follows: Year

Iota Logistics is considering purchasing new delivery trucks. The cost of the trucks is $80,000, and the expected annual cash inflows are as follows:

Year

Cash Flows

0

-80,000

1

20,000

2

20,000

3

20,000

4

20,000

5

20,000

a. Calculate the payback period for the investment. b. If the cost of capital is 7%, should Iota Logistics proceed with the purchase based on the NPV?

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