Net Present Value Analysis with Multiple Investments, Alternative Format. Conway Construction Corporation would like to purchase a fleet of trucks at a cost of $260,000. Additional equipment needed to maintain the fleet of trucks will be purchased at the end of year 2 for $40,000. The trucks are expected to have a life of 8 years, and a salvage value of $20,000. Annual costs for maintenance, insurance, and other cash expenses will total $42,000. Annual net cash receipts resulting from this purchase are predicted to be $135,000. The companys required rate of return is 14 percent.

Required: Find the net present value of this investment

1. Should the company purchase the new fleet of trucks? Explain.