Due to expanded growth in a certain portion of the city, a new waste truck capacity is needed. An additional truck can be purchased now to replace the presently owned assets. The city uses a 5% interest rate for project evaluation. It is economically viable to buy the new waste truck?
New model
Present value $72,000
Annual Cost 12,500
Annual Savings 31,000
Salvage value 7,200
Life in years 10
a) PW= -326,256.87
b) PW= 70, 851.45
c) PW= $75,271.53
d) PW= 191,097.03