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Please explain properly 10. Custom Furniture Co. is considering investing in a new...

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Accounting

Please explain properly

10. Custom Furniture Co. is considering investing in a new truck that will be used to deliver its custom-made furniture. The new truck costs $100,000 and has a useful life of five years. The new truck will save $20,000 per year in operating costs which are realized at the end of each year. If the new truck is purchased, it could be sold for $25,000 at the end of its useful life. Their required rate of return is 10%. What is the new trucks net present value? Select the closest answer. Type of cash flow (n) Periods (i) Interest rate Factor PV of $1 5 10% .62092 FV of $1 5 10% 1.61051 PV of an annuity of $1 5 10% 3.79079 FV of an annuity of $1 5 10% 6.10510 a. $61 b. ($8,661) c. $15,523 d. $75,816

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