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?