Service has experienced more business than its current capacity can handle. Management is looking at a new truck that costs $14,000 that will last six years. The following table represents the estimated cost inflows and outflows for the new truck.  Depreciation and any other tax considerations are ignored. The company uses a discount rate of 15%. According to the present value table, the following are present values of $1 at 15%:

Year | PV | of $1 @ 15% | |
1 | | .86957 | |
2 | | .75614 | |
3 | | .65752 | |
4 | | .57175 | |
5 | | .49718 | |
6 | | .43233 | |
Year | Inflows | Outflows | Net |
0 | $-0- | $(14,000) | $(14, | 000)
1 | 10,000 | (5,200) | 4, | 800
2 | 12,000 | (6,800) | 5, | 200
3 | 11,000 | (7,000) | 4, | 000
4 | 14,000 | (7,400) | 6, | 600
5 | 15,000 | (7,800) | 7, | 200
6 | 14,000 | (7,400) | 6, | 600