Munoz Company is considering investing in two new vans that are expected to generate combined cash inflows of $$33,000$ per year. The vans combined purchase price is $$97,000.$ The expected life and salvage value of each are eight years and $$21,100,$ respectively. Munoz has an average cost of capital of $10$ percent. $$ 

 

Required

Calculate the net present value of the investment opportunity.

Note: Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to $2$ decimal places.

Indicate whether the investment opportunity is expected to earn a return that is above or below the cost of capital and whether it should be accepted.

Answer rating: 100% (QA)

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