Question: Net present value method for a service company Coast-to-Coast inc. is considering the purchase of an additional delivery vehicle for $43,000 on January 1, 20r1.

Net present value method for a service company Coast-to-Coast inc. is considering the purchase of an additional delivery vehicle for $43,000 on January 1, 20r1. The truck is expected to have a 5 -year life with an expected residual value of $5,000 at the end of 5 years. The expected additional revenues from the added delivery capacity are anticipated to be $74,000 per year for each of the next 5 years. A driver will cost $53,000 in 201, 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. s. Determine the expected annual net cash flows from the delivery truck investment for zor 20y5. a. Detormine the expected annual net cash flows from the delivery truck investment for 20 Y 1 - 20 Y 5 . 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 5: presented above. When required, round to the nearest dollar. If recuired, use the minus sign to indicate a regative net present value. c. Is the additional truck a good investment based on vout analyis? . because the net present value is
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