Question

The cost of the truck is $62,000 and the expected cash flows for the next 3 years due to savings from the new truck are $19,920, $22,800, and $31,280. the net present value (npv) of the truck is ____ if the company's required rate of return is 10%.

Answer 1

The net present value of the truck is $-1,546.81. The NPV is equal to the sum of cash inflows (the present value of the savings from the new truck) minus cash outflows (the cost of the truck).