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b. compute the net present value of the investment,assuming that the minimum desired rate of a return is 12%. Use the table of the present value of $1 presented above. If required round to the nearest dollar

Coast-to-Cast Inc. is considering the purchase of an additional delivery vehide for $70,000 on January 1, 2011. The truck is expected to have a five-year life with an expected residual value of $15.000 the end of five years. The expected additional revenues from the added delivery capacity are anticipated to be $65,000 per year for each of the next five years. A driver will cost $40,000 in 2011, with an expected annual salary increase of $2,000 for each year theater. The annual operating costs for the truck are estimated to be 16,000 per Present Value of $1 at Compound Interest 64 104 125 15 2 04 0.943 0.890 0.840 0.792 0.747 0.870 0.756 0.658 0.52 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.893 0.797 0.712 0.636 0.567 0.507 0452 0.404 0.361 0.322 0.705 0.497 0.432 0.376 0.327 0.579 0.480 0.402 0.335 0.279 0.233 0.194 0.162 0.665 0.627 0.592 0.558 0.247 .. Determine the expected annual net cash flows from the delivery truck investment for 2011-2015 Annual Net Cash Flow 2011 2013 2014 2005 e nted bove. If required, round b. Compute the net present value of the investment, assuming that the minimum desired rate of return is 124 Use the table of the rest value of s b. Compute the net present value of the investment, assuming that the minimum desired rate of return is 12%. Use the table of the present value of $1 presented above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative et presenta Present value of annual net cash flows Investment Net present value c. Is the additional truck a good investment based on your analysis? No , because the net present value is negative

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