R22 X fx 21 6. In order to avoid hiring an outside firm to perform your firm's special cargo delivery needs, you consider buying a new truck for $40,000 You have been using a trucking service one day every other week for $200/day, plus $1 per mile. And you always give the driver a $40 tip. Most trips are 90 miles You estimate that your expense of the new truck will be 50.5/mile plus insurance of $1200/year. You would not hire any additional employees, you would just reallocate their time. After 8 years, you figure the truck will be worth $15.000 at which point you'd sell it. If your cost of capital is 9 Is this a positive NPV project? 26 Hint: lay out the savings from NOT using the service as a positive cash flow, because you won't spend that anymore. 21 Then, as negative cashflows, layout the cost of buying the truck and doing this yourself 23 Add and label additional rows, if it keeps you organized Fill these cells with yellow paint: Cashflow zero 1 pt, Cashflow 1 - 1 point, Cashflow 8 = 1 point, Correct NPV calculation and the inclusion of the word "yes" or "no" - 2 points yes buy the truck, no do not buy the truck For a total of 5 points Initial investment Savings from NOT using service New truck expenses: Net Cash Flow NPV at 9 s Yes or no