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 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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