QUESTION $18$

MSB Trucking Corporation is planning to purchase a new truck at a cost of $$100,000.$ The increased business from this investment will increase the revenue of the company by

$$80,000$ per year for the next six

years. All costs to operate the truck including taxes will be $$55,000$ each year. At the end of the six years, the truck will be sold to a junk yard to net $$5,000$ after taxes. The company's

cost of capital is $12$ percent. The level of risk of sales from this truck is the same as the overall risk for the company. What is the NPV of this truck purchase decision? $($Hint: Cash flows

are constant in Years $1$ to $5.)$

A$.$ $$149,218$

B$.$ $$128,661$

C$.$ $$108,104$

D$.$ $$87,546$

E$.$ $$66,989$

F$.$ $$46,432$

G$.$ $$25,875$

H$.$ $$5,318$