Totally Chemical is considering an investment decision project in which the organization expands into the trucking...

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Totally Chemical is considering an investment decision project in which the organization expands into the trucking business. Totally Chemical wants to begin this investment decision project by buying one truck. In four years, the truck can be sold for $25,000, with $2,000 of the working capital being returned. The discount rate is 8%. Trucking Venture Specifics Initial investment Cost of the truck Working capital deposit Operations (per year for 4 years) Trucking revenue $95,000 $5,000 $250,000 Less: Driver's salary $95,000 Insurance $20,000 Fuel and maintenance $50,000 Total expenses $165,000 $85,000 Net annual cash flows Disinvestment Sale of truck Recovery of working capital Total disinvestment 1. Calculate the net present value (NPV) method of capital budgeting. 2. Calculate the internal rate of return (IRR) method of capital budgeting. 3. Calculate the payback period (PP) method of capital budgeting. $25,000 $2,000 $27,000 Totally Chemical is considering an investment decision project in which the organization expands into the trucking business. Totally Chemical wants to begin this investment decision project by buying one truck. In four years, the truck can be sold for $25,000, with $2,000 of the working capital being returned. The discount rate is 8%. Trucking Venture Specifics Initial investment Cost of the truck Working capital deposit Operations (per year for 4 years) Trucking revenue $95,000 $5,000 $250,000 Less: Driver's salary $95,000 Insurance $20,000 Fuel and maintenance $50,000 Total expenses $165,000 $85,000 Net annual cash flows Disinvestment Sale of truck Recovery of working capital Total disinvestment 1. Calculate the net present value (NPV) method of capital budgeting. 2. Calculate the internal rate of return (IRR) method of capital budgeting. 3. Calculate the payback period (PP) method of capital budgeting. $25,000 $2,000 $27,000