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Sheridan Manufacturers is considering investing in a new truck that will be used to deliver its custom-made furniture. Steven Shop, Controller of Sheridan Manufacturers, is

Sheridan Manufacturers is considering investing in a new truck that will be used to deliver its custom-made furniture. Steven Shop, Controller of Sheridan Manufacturers, is considering a truck which will cost $91200 and which has a useful life of 5 years. The new truck will save $10944 per year in operating costs which are realized at the end of each year. Steven believes if the new truck is purchased it could be sold for $73530 at the end of its useful life. Sheridan's required rate of return is 8%.

Type of cash flow Periods Interest rate Factor
PV of $1 5 8% 0.6806
FV of $1 5 8% 1.4693
PV ordinary annuity 5 8% 3.9927
FV ordinary annuity 5 8% 5.8666
PV annuity due 5 8% 4.3121

What is the new truck's net present value? (round to the nearest dollar)

$2541

$-10904

$21848

$-8890

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