Question: Nancy's Notions pays a delivery firm to distribute its products in the metro area. Delivery costs are $32,000 per year. Nancy can buy a used truck for $8,000 that will be adequate for the next 5 years. Operating and maintenance costs are estimated to be $22,000 per year. At the end of 5 years, the used truck will have an estimated salvage value of $5,000. Nancy's MARR is 22%/year.
What is the present worth of this investment? $
Round entry to two decimal places. The tolerance is ±5.
What is the decision rule for judging the attractiveness of investments based on present worth?
Should Nancy buy the truck?