QUESTION $3$

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 $$50,000$ each year. At the end of the six years, the truck will be sold to a junk yard to net $$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$