An office supply company has purchased a light-duty delivery truck for $15,000. It is anticipated that the purchase of the truck will increase the company’s revenue by $10,000 annually, while the associated operating expenses are expected to be $3,000 per year. The truck’s market value is expected to decrease by $2,500 each year it is in service.

If the company plans to keep the truck for only two years, what is the Net Present Value (NPV) of this investment? The minimum acceptable rate of return (MARR) = 18% per year.

Answer rating: 100% (QA)

Determining the cash inflow for the two years Expected revenue 1000... View the full answer