I need help with this question please provide step by step of calculations & provide recommendations.

2) Using the question 1 results & exhibit #1, compute the incremental annual revenues (cash inflows) and expenses (cashoutflows) given an investment in a larger truck (i.e. what is the difference inrevenue and expense between the old truck and the new truck).

Goat Case Tips:

? salvage value of the new truck/trailer should not be incorporated into the model
? salvage value of the new truck/trailer should be added to the cash inflow in year 5
? only the incremental cash inflows/outflows should be considered when calculating
the npv, irr & payback period (meaning the difference between the old and new truck/trailer)
? proceeds of the old truck/trailer should be deducted from the initial cash outlay (ie the purchase of the new truck/trailer)

question 1 results:

			small truck	large truck
			25 goats	32 goats
Calendar days to complete job			7	6
# of jobs	35	41
Total working days	250	250

Page 5 9B11B025 Exhibit 1 ACTUAL REVENUES AND COSTS FOR THE RESORT LAND-CLEARING JOB (in U.S. dollars) Per day Project Calendar days needed to complete the project' 7 Revenues Revenue per calendar day $375.00 Total revenues $2,625.00 Variable costs Transportation costs Round trip distance (miles) 80 Rate per mile $0.63 Transportation costs per calendar day $50.40 Total transportation costs (352.80) Shepherd and dog Rate per calendar day $190.00 Total shepherd and dog costs (1.330.00) Total variable costs per calendar day $240.40 _(1.682.80) Contribution margin $134.60 $942.20 Fixed costs Setup (100.00) Fencing Linear feet 962 Rate per linear foot $0.75 Total fencing costs (721.50) Total fixed costs (821.50) Profit $120.70 Source: Case writers' calculations