Palo alto corporation is considering purchasing a new delivery truck. the truck has many advantages over the companys current truck (not the least of which is that it runs). the new truck would cost $56,850. because of the increased capacity, reduced maintenance costs, and increased fuel economy, the new truck is expected to generate cost savings of $8,560. at the end of 8 years the company will sell the truck for an estimated $28,490. 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 assets 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 companys cost of capital is 8%. (refer the below table).

A) Compute the cash payback period and net present value of the proposed investment.

74258 3 37284 18042 9823 35817 88720 2 02935 328 84190 93283 95212 7610 38833 73731 34854 77 w94774 54562 35322 22217 85297 53197 34338 79759 81064 9 93805 14221 57350 030 25938 38 98776 65 4 43333 22222 84009 45135 91625 3765 2 7093 00984 75 472 2238 5 2 98 877 66555 44433 33222 1001 5718 6682 6295 29641 97531 83403 28411 84272 10239 30875 2 of I 86556 308 53197 50628 417 9887 77666 902594 5 33346 4 9 9888 77776 66655 55444 3 n) io 1 2 3 4 5 67890 12345 67890