Question: Exercise 10-5A (Algo) Determining net present value LO 10-2 Franklin 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 Franklin Company

Exercise 10-5A (Algo) Determining net present value LO 10-2 Franklin Company is considering investing in two new vans that are expected to generate combined cash inflows of $29.000 per year. The vans' combined purchase price is $91,000. The expected life and salvage value of each are seven years and $20,300, respectively. Franklin has an average cost of capital of 14 percent. (PV of \$1 and PVA of \$1) (Use appropriate factor(5 from the tables provided.) Required a. Calculate the net present value of the investment opportunity. (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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