Calculate the net present value of the new electric truck

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Question - Koch limited is about to replace its existing fleet of diesel trucks with electric ones. The nee electric truck will cost $100,000 and has a useful life of 10 years, at which time the truck will be worthless. However, Koch limited has the practice of replacing its fleet every 5 years, and be worthless. However, Koch limited has the practice of replacing its fleet every 5 years and expects to sell the electric truck for $30,000 then. Due to the efficient of the new truck, the co Pant expects to generate additional $20,000 revenue per year over the next five years. Additionally, the fuel and maintenance costs for the electric truck are $5,000 lower each year than diesel truck. Assume straight line depreciation and a discount rate of 10% and if ignore tax.

Required -

A- Calculate the accounting rate of return of the new electric truck?

B- Calculate the payback proof of the new electric truck?

C- Calculate the net present value of the new electric truck?

Reference no: EM133016543

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