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Truck Acquisition You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck. The truck's basic

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Truck Acquisition You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck. The truck's basic price is $50,000, and it will cost another $10,000 to modify it for special use by your firm. The truck falls into the MACRS three-year class, and it will be sold after three years for $20,000. Use of the truck will require an increase in net working capital (spare parts inventory) of $2,000. The truck will have no effect on revenues, but it is expected to save the firm $20,000 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 40 percent. [MACRS table required and can be found in Chapter 13] Refer to Truck Acquisition. The truck's required rate of return is 10 percent. What is its NPV? $0$1,034$562$1,547$562

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