Hess Company is analyzing a capital budgeting decision involving the purchase of a used delivery truck for $22,000. The company’s discount rate is 12%. Managers have calculated an 11% internal rate of...

Hess Company is analyzing a capital budgeting decision involving the purchase of a used delivery truck for $22,000. The company’s discount rate is 12%. Managers have calculated an 11% internal rate of return on the truck. In this analysis, which of the following statements will be true?

a. The net present value of the truck is greater than zero.

b. If the truck’s annual maintenance costs increase, its internal rate of return will increase.

c. The truck is an acceptable investment under the internal rate of return method.

d. The present value of the future cash flows generated by the truck is less than $22,000.