Problem 12-4A Jane's Auto care is considering the purchase of a new truck. The garage doesnt currently have a tow truck, and the ss9,960 price tag for a new truck would represent a major expenditure. Jane Austen, owner of the garage, has compiled the estimates shown below in trying to determine whether the tow truck should be purchased. $59,960 Estimated useful life Net annual cash flows from towing S7.970 overhaul costs (end of year 4) S6.000 Salvage value $11.990 Jane's good friend, Rick Ryan, stopped by. He is trying to convince Jane that the tow truck will have other benefits that Jane hasn't even considered. First, he says, cars that need towing need to be fixed. Thus, when Jane tows them to her facility, her repair revenues will increase. Second, he notes that the tow truck could have a plow mounted on it, thus saving Jane the cost of plowing her parking lot. (Rick will give her a used plow blade for free if Jane will plow Rick driveway.) Third, he notes that the truck will generate goodwil; people who are rescued by Jane's tow truck will feel grateful and might be more inclined to use her service station in the future or buy gas there. Fourth, the tow truck will have "Jane's Auto Care" on its doors, hood, and back tailgate-a form of free advertising wherever the tow truck goes. Rick estimates that, at a minimum, these benefits would be worth the following. Additional annual net cash flows from repair work S3,010 Annual savings from plowing 760 Additional annual net cash flows from customer "goodwill" 960 Additional annual net cash flows resulting from free advertising 740 The company's cost of capital is 9%