STU Ltd is planning to purchase a new truck costing $80,000. The truck will save the company $20,000 annually in operating costs for 6 years. The salvage value of the truck at the end of its useful life is estimated to be $10,000.

Requirements:

1. Calculate the payback period.
2. Calculate the NPV assuming a discount rate of 15%.
3. Calculate the IRR.
4. Determine the profitability index.
5. Make a recommendation on whether to purchase the truck.