NPV:

- Do the Total Cost Approach first then, do an Incremental Cost Approach analysis below your Total Cost Approach. They should both be on the same page. - REQUIRED COMPONETS: o Two Logic "IF" statements MUST be used to label the Decision as being in favor of overhauling the old truck or in favor of purchasing the new truck. One Logic IF for the Total Cost Approach and one Logic IF for the Incremental Cost Approach. This is a required component for this assignment. If you do not complete both Logic IF stmts, you will not receive credit for this assignment. o Excel's PV function must be used to calculate the present value of the cash flows. Do not use the factor tables as is illustrated in the text. o A data block and cell referencing is required. - There is NO What IF part to this assignment. 1. Computation of NPV of Keep The truck 2. Computation of NPV of Purchase of New The DATA BLOCK AND ANALYSES FORMATS: - An Excel #2 template has been posted also with the following format illustrated below for your data block page and the analysis report. - Include the total cost approach analysis and the incremental analysis both on one spreadsheet page. - The template posted for Excel #2 uses the format illustrated on the following page for your total cost approach analysis: Bilboa Freightlines, S.A. Total Cost Approach Bilboa Freightlines, S.A. Incremental investment - in favor of old truck Additional annual cash operating costs Lost salvage value in five years Lost salvage value for old truck now Logic IF statement belongs here - Do the Total Cost Approach first then, do an Incremental Cost Approach analysis below your Total Cost Approach. They should both be on the same page. - REQUIRED COMPONETS: o Two Logic "IF" statements MUST be used to label the Decision as being in favor of overhauling the old truck or in favor of purchasing the new truck. One Logic IF for the Total Cost Approach and one Logic IF for the Incremental Cost Approach. This is a required component for this assignment. If you do not complete both Logic IF stmts, you will not receive credit for this assignment. o Excel's PV function must be used to calculate the present value of the cash flows. Do not use the factor tables as is illustrated in the text. o A data block and cell referencing is required. - There is NO What IF part to this assignment. 1. Computation of NPV of Keep The truck 2. Computation of NPV of Purchase of New The DATA BLOCK AND ANALYSES FORMATS: - An Excel #2 template has been posted also with the following format illustrated below for your data block page and the analysis report. - Include the total cost approach analysis and the incremental analysis both on one spreadsheet page. - The template posted for Excel #2 uses the format illustrated on the following page for your total cost approach analysis: Bilboa Freightlines, S.A. Total Cost Approach Bilboa Freightlines, S.A. Incremental investment - in favor of old truck Additional annual cash operating costs Lost salvage value in five years Lost salvage value for old truck now Logic IF statement belongs here