eng EX 11-8 Net present value method for a service company A. 20Y1, $13,000 AM Express Inc. is considering the purchase of an additional delivery vehicle for $55,000 on January 1, 2011. The truck is expected to have a five-year life with an expected residual value of $15,000 at the end of five years. The expected additional revenues from the added delivery capacity are anticipated to be $58,000 per year for each of the next five years. A driver will cost $42,000 in 20Y1, with an expected annual salary increase of $1,000 for each year thereafter, The annual operating costs for the truck are estimated to be $3,000 per year. A. Determine the expected annual net cash flows from the delivery truck investment for 20Y1-20Y5. B. Calculate the net present value of the investment, assuming that the minimum desired rate of return is 12%. Use the present value of $1 table appearing in Exhibit 2 of this chapter. C. Is the additional truck a good investment based on your analysis? Explain. Bolo tot 107 alizoqo Thement Intioso ow bn stoonin) Ob913999 berlokasi rynn Not procent value method-annuity for a service company Obj. 3