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Question: Willis company is considering the replacement of a truck. the new truck costs $78,000, has a useful life of 6 years, and will have no salvage value. it's estimated that the new truck would result in substantial savings over the next 6 years. the following cost savings have been projected.

year 1 - $13,000

year 2 - $15,000

year 3 - $18,000

year 4 - $19,000

year 5 - $20,000

year 6 - $21,000

The company's hurdle rate is 12%. find the net present value. should the new truck be purchased?

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Accounting Basics, Accounting

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