Problem 14-28 (Algo) Ner Present Value Analysis (LO14-2] Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for Intracity deliveries. The truck is worn out and must be eit overhauled or replaced with a new truck. The company has assembled the following information New Truck $ 39,000 Purchase cost new Rensining book value Overhaul needed now Annual cash operating costs Salvage value-now Salvage volue-five years from now Present Truck $ 30,000 $ 17,000 $ 16,000 $ 15,500 $ 9,000 58,000 5 14,000 $ 10,000 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 live 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 9% discount rate Click here to view Ext. 148.1 and Exhibit 14B-2, to determine the appropriate discount factors) using tables, Required: 1. What is the net present value of the "keep the old truck" alternative? 2. What is the net present value of the "purchase the new truck alternative? 3. Should Biboa Freightlines keep the old truck or purchase the new one