Jane's Auto Care is considering the purchase of a new tow truck. The garage doesn't currently have a tow truck, and the $59.950 price tag for truck would represent a major expenditure. Jane Austen, owner of the garage, has compiled the estimates shown below in trying to determine whether the tow truck should be purchased. Initial cost $59,950 Estimated useful life 8 years Net annual cash flows from towing $7.950 Overhaul costs (end of year 4) $5.950 Salvage value $11.990 Jane's good friend. Rick Ryan, stopped by. He is trying to convince Jane that the tow truck will have other benefits that Jane hasn't even consider First, he says. cars that need towing need to be fixed. Thus, when Jane tows them to her facility, her repair revenues will increase. Second, he note that the tow truck could have a plow mounted on it, thus saving Jane the cost of plowing her parking lot. (Rick will give her a used plow blade for fr if Jane will plow Rick's driveway) Third, he notes that the truck will generate goodwill people who are rescued by Jane's tow truck will feel gratefu and might be more inclined to use her service station in the future or buy gas there. Fourth the tow truck will have "Jane's Auto Care' on its doors hood, and back tailgate-a form of free advertising wherever the tow truck goes. Rick estimates that, at a minimum, these benefits would be worth the following Additional annual net cash flows from repair work Annual savings from plowing Additional annual net cash flows from customer goodwill Additional annual net cash flows resulting from free advertising $2.990 740 950 740 The company's cost of capital is 9% Your answer is partially correct. Calculate the net present value, ignoring the additional benefits described by Rick. (if the net present value is negative, use either a negative si preceding the 3.-45 or parentheses 45 (45). Round answer to decimal places, eg. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided Net present value $ Should the tow truck be purchased? The tow truck should not be purchased. e Textbook and Media Your answer is partially correct. calculate the nel present value. Incorporating the additional benefits surrested by Rick, if the net present value is negative use there number -45 or parentheses (451. Round answer to decimal places.. 125. For calculation purposes, use 5 decimal places as displayed in the factor Net present values