Problem 14-28 (Algo) Net Present Value Analysis [LO14-2] Bilboa Freightlines, S.A, of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either overhauled or replaced with a new truck. The company has assembled the fallowing information: Purchase cost new Remaining book value Overhaul needed now Annual cash operating costs Salvage value-five years from now Salvage value-now Present Truck $ 36,000 $ 23,000 $22,000 New Truck $ 48,000 $ 17,500 $ 16,000 $ 12,000 $ 15,000 $ 6,000 If the company keeps and overhauls its present delivery truck, then the truck will be usable for five more years. If a new truck is purchased, it will be used for five years, after which it will be traded in on another truck. The new truck would be diesel-operated, resulting in a substantial reduction in annual operating costs, as shown above. The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 9% discount rate. Click here to view Exhibit 14B-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using tables.