Question: Problem 12-28 (Static) Net Present Value Analysis [LO12-2] Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity dellveries. The truck

Problem 12-28 (Static) Net Present Value Analysis [LO12-2] Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity dellveries. The truck is worn out and must be either overhauled of replaced with a new truck. The company has assembled the following information: If the company keeps and overhauls its present delivery truck, then the truck will be usable for five more years. If a new truck is purchased, it will be used for five years, after which it will be traded in on another truck. The new truck would be diesel-operated, resulting in a substantial reduction in annual operating costs, as shown above. The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 16% discount rate. Click here to view Exhibit 128-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using tables. Required: 1. What is the net present value of the "keep the old truck" alternatwe? 2. What is the net present value of the "purchase the new truck" alternative? 3. Should Bilboa Freightines keep the old truck or purchase the new one? Complete this question by entering your answers in the tabs below. What is the net present value of the "keep the old truck" alternative? (Enter negative amount with a minus sign, Round your final answer to the nearest whole dollar amount.)

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