Question: Exercise 10-5A (Algo) Determining net present value LO 10-2 Campbell Company is considering investing in two new vans that are expected to generate combined cash
Exercise 10-5A (Algo) Determining net present value LO 10-2 Campbell Company is considering investing in two new vans that are expected to generate combined cash inflows of $32,500 per year. The vans' combined purchase price is $91,000. The expected life and salvage value of each are four years and $21,100, respectively. Campbell has an average cost of capital of 16 percent. (PV of \$1 and PVA of \$1) Note: Use appropriate factor(s) from the tables provided. Required a. 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. b. 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
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