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Linkin Corporationis considering purchasing a new delivery truck. The truck has many advantages over the compacy's current truck (not the least of which is that

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Linkin Corporationis considering purchasing a new delivery truck. The truck has many advantages over the compacy's current truck (not the least of which is that it runs). The new truck would cost $56,280. 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 compary will seil the truck for an estimated $27,600. Traditionally the company has used a rule of thumb that a proposal should not be accepted unless it has a parback period that is less than 50% of the asset's estimated usetul life. Lacry 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 compary/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. Af the net present value is negative, une either a negative sisn preceding the number 645 or parentheses es (45). Round answer for present value to 0 decimal places, eg. 125. Round answer for Paybeck period to 1 decimal place, es. 10.5. For coladation purposes, use 5 decimal ploces as disploped in the foctor toble provided) (b) Does the project meet the company's cash paybsck criteria? Does it met the net present value criaeria for acceptance? Linkin Corporationis considering purchasing a new delivery truck. The truck has many advantages over the compacy's current truck (not the least of which is that it runs). The new truck would cost $56,280. 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 compary will seil the truck for an estimated $27,600. Traditionally the company has used a rule of thumb that a proposal should not be accepted unless it has a parback period that is less than 50% of the asset's estimated usetul life. Lacry 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 compary/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. Af the net present value is negative, une either a negative sisn preceding the number 645 or parentheses es (45). Round answer for present value to 0 decimal places, eg. 125. Round answer for Paybeck period to 1 decimal place, es. 10.5. For coladation purposes, use 5 decimal ploces as disploped in the foctor toble provided) (b) Does the project meet the company's cash paybsck criteria? Does it met the net present value criaeria for acceptance

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