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Aaron Heath is seeking part-time employment while he attends school. He is considering purchasing technical equipment that will enable him to start a small training

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Aaron Heath is seeking part-time employment while he attends school. He is considering purchasing technical equipment that will enable him to start a small training services company that will offer tutorial services over the Internet. Aaron expects demand for the service to grow rapidly in the first two years of operation as customers learn about the availability of the Internet assistance. Thereafter, the expects demand to stabilize. The following table presents the expected cash flows. Year of Operation Cash InfoCash Outflow Year 1 513,000 $ 9,600 19.100 11,100 Year 3 22,100 13,100 22.100 11,100 Year 2 Year 1 In addition to these cash flows. Aaron expects to pay $20,500 for the equipment. He also expects to pay $3,100 for a major overhaul and updating of the equipment at the end of the second year of opetation. The equipment is expected to have a $1,000 salvage value and a four year useful life. Aaron desires to earn a rate of return of 8 percent. PVDS and PVA S1) (Use appropriate foctor(s) from the tables provided) Required ..Calcetinet procent value of the rivestment opportunity (Negotive omount should be indicated by a minus sign. Round b. Indicate whether the investment opportunity is expected to earn a return the above or below the desired rate of return and whether it should be accepted Net present van Whereum beatove of brow the cost of capital Should the investment opportunity be accepted

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