Net Present Value Method for a Service Company Coast-to-Coast Inc. is considering the purchase of an additional delivery vehicle for $46,000 on January 1, 20Y1. The truck is expected to have a 5-year life with an expected residual value of $7,000 at the end of 5 years. The expected additional revenues from the added delivery capacity are anticipated to be $73,000 per year for each of the next 5 years. A driver will cost $50,000 in 20Y1, with an expected annual salary increase of $4,000 for each year thereafter. The annual operating costs for the truck are estimated to be $3,000 per year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. X Open spreadsheet a. Determine the expected annual net cash flows from the delivery truck investment for 20Y1-20Y5. Annual Net Cash Flow 15,000 X 20Y1 20Y2 12,000 X 20Y3 9,000 X 20Y4 20Y5 6,000 X 10,000 X b. Compute the net present value of the investment, assuming that the minimum desired rate of return is 15%. When required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. Check My Work Previous Next >