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A bakery is deciding whether to buy an extra van to help deliver its products. The van will cost $28,000, but is expected to increase

A bakery is deciding whether to buy an extra van to help deliver its products. The van will cost $28,000, but is expected to increase profits by $6500 per year over the five years of its working life. Which of the following is the correct net present value (NPV) profile for this purchase?

(a) NPV: 7000; discount rate: 8

(b) NPV: 4000; discount rate: 3.9

(c) NPV: 7000; discount rate: 8;7

(d) NPV: 4400; discount rate: 5.1

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