Question 4 [11 marks] Lulu Hypermarket has a pickup truck that it uses to deliver the online orders to their customers. The truck must be eit assembled the following information: old Truck New Truck Purchase cost $38,000 $48,000 Remaining book value $28,000 Overhaul needed $27,000 Annual cash operating costs $20,000 $18,500 Salvage value-in five years $14.000 $12,000 If the company keeps and overhauls its old delivery truck currently in use, then the truck will be usable for five more after which it will be traded in with another truck. The new truck would be diesel-operated, resulting in a substantial redIf the company keeps and overhauls its old delivery truck currently in use, then the truck will be usable for five more after which it will be traded in with another truck. The new truck would be diesel-operated, resulting in a substantial red The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 7% discount discount factor(s) Present Value of $1; 1 ( 1 + r ) Periods 4% 5% 6% 7% 8% 19% 10% 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.760 0.711 0.665 0.623 0.583 0.547 0.513 Present Value of an Annuity of $1 in Arrears; 1 r [ 1 - 1 (1 + r ) n ] Periods 4% 5% 6% 7% 18% 19% 10% 3.630 3 546 3.465 3.387 3 312 3.240 3.170 4.452 4.329 4.212 4.100 3.993 3.890 3.791 16 5.242 5.076 4.917 4.767 4.623 4.486 4.355 6.002 5.786 5.582 5.389 5.206 5.033 4.868 Required: What is the net present value of the "keep the old truck" alternative? What is the net present value of the "purchase the new truck" alternative? Should Lulu Hypermarket keep the old truck or purchase the new one? Why? or the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). B I US Paragraph Arial 14px EVEVAV