Pisa Pizza Parlor is investigating the purchase of a new $45,000 delivery truck that would contain specially designed warming racks. The new truck would have a nine-year useful life. It would save $6,000 per year over the present method of delivering pizzas. In addition, it would result in the sale of 2,000 more pizzas each year. The company realizes a contribution margin of $2 per pizza. (Ignore income taxes.)

Required:
1.	What would be the total annual cash inflows associated with the new truck for capital budgeting purposes?

Annual savings over present method of delivery	$
Added contribution margin from expanded deliveries
Annual Cash Flows	$

2.	Find the internal rate of return promised by the new truck to the nearest whole percent. (Round discount factor(s) to 3 decimal places.)

Choose Numerator	/	Choose Denominator	=		Number of years	Internal rate of return
	/		=	factor
	/		=			%

3.	In addition to the data already provided, assume that due to the unique warming racks, the truck will have a $20,000 salvage value at the end of nine years. Under these conditions, compute the internal rate of return to the nearest whole percent.