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just need question 2 answered, please show work for full credit. The answer is not -103,829 or -107,398 looking for net present value of purchase
just need question 2 answered, please show work for full credit. The answer is not -103,829 or -107,398 looking for "net present value" of "purchase the new truck" Return to question Problem 12-28 Net Present Value Analysis (LO12-2] Bilboa Freightlines, S.A., of Panama, has a small truck that 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 information: New Truck $ 36,000 Purchase cost (new) Remaining book value Overhaul needed now Annual cash operating costs Salvage value-now Salvage value-five years from now Present Truck $ 31,000 $ 24,000 $ 23,000 $ 22,000 $ 5,000 $ 20,000 $ 19,500 $ 12,000 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, after which it will be traded in on another truck. The new truck would be diesel-operated, resulting in a substantial reduction in annual operating costs, as shown above. The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 7% discount rate. Click here to view Exhibit 12B1 and Exhibit 120 2. to determine the appropriate discount factor(s) using tables.
just need question 2 answered, please show work for full credit. The answer is not -103,829 or -107,398
looking for "net present value" of "purchase the new truck"
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