Linkin Corporation is considering purchasiaga new defivery truck. The truck has many advantages over the company's current trick Inot the least of whichis that it runs). The new truck would cost $54,750. Because of the increased capacity, reduced maintenance costs, and increased fuel econcmy, the new truck is expected to generate cost savings of $7.500. At the end of 6 years, the company well sell the truck for an estimated 527,300 . Traditonally the company har used a rule of thumb that a proporal should not be accepted unless it has a payback period that is less than 50% of the asset's estimated ufetul life tarry Newton, a new manager, has suegested that the company should not rely solely en the payback approsch but should abo employ the net present value method when evalaating new projects. The company's cont of capital is bik Clikkere boview the factor take (a) Compote the cash paybsck period and net present valoe of the propoted investment. If the net present value is oesative, use tither a negative igh preceding the number ex -45 or parentheses es (45). Found answer for present value to 0 decimal places, e.1. 125. Round answer for Paybuck period to 1 decimal ploce, e. . 10.5, For calculation purpeses, use 5 decimat plates as displayed in the fecter table provided.\} Canhparbackperiod Net present value $ b Don is meet the cet present vake ditecia for acceotancel? eTextbook and Mesia AEtemets:2 ef y ved Hillsong inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago, Hillsong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $242.828. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7 : The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,600. This new equipment would require maintenance costs of $95,600 at the end of the fift year. The cost of capital is 9\%. Click here to view the factor table. Use the net present value method to determine the following (If net present value is negative then enter with negative sign. preceding the number e.g. 45 or parentheses e.s. (45). Round present value answer to 0 decimal places, e.3. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Calculate the net present value. Netpresent value $ Determine whether Hillsons should purchase the new machine to replace the existing machine
