Haulin'It Towing Company Is Considering Adding More Tow Trucks to Its

Haulin'It Towing Company is considering adding more tow trucks to its fleet. The cost of the new trucks is $150,000. The project will utilize the risk adjusted discount, the firm has a beta of 1.3, the risk free rate is 7% and the return in the market is 15%. Should Haulin' It add the additional trucks if the expected increased revenues will be as follows?

A) No, the npv of the project is -$15,175.19
B) Yes, the npv of the project is $75,275.16
C) No, the npv of the project is -$9,765.12
D) Yes, the npv of the project is $55,050.92

Correct Answer:

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