Question: Schwartz Inc. is deciding whether to replace its existing delivery truck with a new one. The new truck offers considerable fuel savings. Another advantage of

 Schwartz Inc. is deciding whether to replace its existing delivery truck

Schwartz Inc. is deciding whether to replace its existing delivery truck with a new one. The new truck offers considerable fuel savings. Another advantage of the new truck is that it can haul 105% of the existing truck's payload. Projected annual revenue from cargo hauling with the existing truck is $200,000. There is projected excess demand for cargo hauling. The existing truck could be sold at the end of one year for $40,000. Other information about the existing and new trucks is as follows: Required: Assume the discount rate for Schwartz is 8% and its income tax rate is 20%. Should the company purchase the new truck

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