Padong Corporation is considering purchasing a new delivery truck . The truck has many advantages over the company's current truck ( not the least of witch is that it runs). The new truck would cost $56,000. Because of the increased capacity , reduced maintenance cost , and increased fuel economy , the new truck is expected to general cost saving of $8,000. At the end of 8 year the company will sell the truck for an estimated $30,000. Traditionally the company has used a rule of thumb that 50% of the asset's estimated useful life. Kevin a new manager , has suggested that the company should not rely solely on the payback approach , but should also employ the net present value method when evaluating new project . The company's cost of capital is 8%