Linkin Corporation is considering purchasing a new delivery truck. The truck has many advantages over the company's current truck (not the least of which is that it runs). The new truck would cost $55,440. Because of the increased capacity, reduced maintenance costs, and increased fuel economy, the new truck is expected to generate cost savings of $8,400. At the end of 8 years, the company will sell the truck for an estimated $28,200. Traditionally the company has used a rule of thumb that a proposal should not be accepted unless it has a payback period that is less than 50% of the asset's estimated useful life. Larry Newton, a new manager, has suggested that the company should not rely solely on the payback approach, but should also employ the net present value method when evaluating new projects. The company's cost of capital is 8%. Click here to view the factor table. (a) Compute 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 eg -45 or parentheses eg (45). Round answer for present value to O decimal places, e.g. 125. Round answer for Payback period to 1 decimal place, e.g. 10.5. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Cash payback period Net present value years TABLE 4 Present Value of an Annuity of 1 234in (n) Payments 4% 5% 6% 1 .96154 .95238 2 7% 8% 9% .94340 0.93458 1.88609 1.85941 1.83339 1.80802 2.77509 2.72325 2.67301 2.62432 3.62990 3.54595 3.46511 3.38721 4.45182 4.32948 4.21236 4.10020 68890=! 5.24214 5.07569 4.91732 6.00205 5.78637 6.73274 6.46321 5.58238 4.76654 5.38929 6.20979 5.97130 7.43533 7.10782 6.80169 6.51523 10 8.11090 7.72173 7.36009 7.02358 11 8.76048 8.30641 7.88687 12 9.38507 8.86325 13 9.98565 9.39357 14 10.56312 9.89864 9.29498 15 11.11839 10.37966 9.71225 9.10791 8.55948 8.06069 10% .92593 .91743 90909 .90090 1.78326 1.75911 1.73554 1.71252 1.69005 1.62571 2.57710 2.53130 2.48685 2.44371 2.40183 2.28323 3.31213 3.23972 3.16986 3.10245 3.03735 2.85498 3.99271 3.88965 3.79079 3.69590 3.60478 3.35216 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448 5.20637 5.03295 4.86842 4.71220 4.56376 4.16042) 5.74664 5.53482 5.33493 5.14612 4.96764 4.487321 6.24689 5.99525 5.75902 5.53705 5.32825 4.77158 6.71008 6.41766 6.14457 5.88923 5.65022 5.01877 7.49867 7.13896 6.80519 6.49506 6.20652 5.93770 5.23371 8.38384 7.94269 7.53608 7.16073 6.49236 5.42062 6.81369 6.19437 8.85268 8.35765 7.90378 7.48690 7.10336 6.74987 6.42355 5.58315 8.24424 8.74547 7.78615 5.72448 7.36669 6.62817 6.98187 6.81086 7.19087 5.84737 11% 12% 15% .89286 .86957 7.60608 16 11.65230 10.83777 10.10590 9.44665 8.85137 8.31256 7.82371 7.37916 6.97399 5.95424) 17 12.16567 11.27407 10.47726 9.76322 9.12164. 8.54363 8.02155 7.54879 7.11963 6.04716 18 12.65930 11.68959 10.82760 10.05909 9.37189 8.75563 8.2 0141 7.70162 7.24967 6.12797 19 13.13394 12.08532 11.15812 10.33560 9.60360 8.95012 8.36492 7.83929 7.36578 6.19823 20 13.59033 12.46221 11.46992 10.59401 9.81815 9.12855 8.51356 7.96333 7.46944 6.25933