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, he expects demand to stabilize. The following table presents the expected cash flows:

Year of
Operation	Cash Inflow	Cash Outflow
2019	$	13,200		$	9,400
2020		19,200			11,700
2021		21,100			13,100
2022		21,100			13,100

In addition to these cash flows, Aaron expects to pay $21,400 for the equipment. He also expects to pay $3,000 for a major overhaul and updating of the equipment at the end of the second year of operation. The equipment is expected to have a $1,600 salvage value and a four year useful life. Aaron desires to earn a rate of return of 9 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Required

Calculate the net present value of the investment opportunity. (Negative amount should be indicated by a minus sign. Round 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 desired rate of return and whether it should be accepted.

\begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|} \hlinen & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 12% & 14% & 16% & 20% \\ \hline 1 & 0.961538 & 0.952381 & 0.943396 & 0.934579 & 0.925926 & 0.917431 & 0.909091 & 0.892857 & 0.877193 & 0.862069 & 0.833333 \\ \hline 2 & 1.886095 & 1.859410 & 1.833393 & 1.808018 & 1.783265 & 1.759111 & 1.735537 & 1.690051 & 1.646661 & 1.605232 & 1.527778 \\ \hline 3 & 2.775091 & 2.723248 & 2.673012 & 2.624316 & 2.577097 & 2.531295 & 2.486852 & 2.401831 & 2.321632 & 2.245890 & 2.106481 \\ \hline 4 & 3.629895 & 3.545951 & 3.465106 & 3.387211 & 3.312127 & 3.239720 & 3.169865 & 3.037349 & 2.913712 & 2.798181 & 2.588735 \\ \hline 5 & 4.451822 & 4.329477 & 4.212364 & 4.100197 & 3.992710 & 3.889651 & 3.790787 & 3.604776 & 3.433081 & 3.274294 & 2.990612 \\ \hline 6 & 5.242137 & 5.075692 & 4.917324 & 4.766540 & 4.622880 & 4.485919 & 4.355261 & 4.111407 & 3.888668 & 3.684736 & 3.325510 \\ \hline 7 & 6.002055 & 5.786373 & 5.582381 & 5.389289 & 5.206370 & 5.032953 & 4.868419 & 4.563757 & 4.288305 & 4.038565 & 3.604592 \\ \hline 8 & 6.732745 & 6.463213 & 6.209794 & 5.971299 & 5.746639 & 5.534819 & 5.334926 & 4.967640 & 4.638864 & 4.343591 & 3.837160 \\ \hline 9 & 7.435332 & 7.107822 & 6.801692 & & & 5.995247 & 5.759024 & 5.328250 & 4.946372 & 4.606544 & 4.030967 \\ \hline 10 & 8.110896 & 7.721735 & 7.360087 & 7.023582 & 6.710081 & 6.417658 & 6.144567 & 5.650223 & 5.216116 & 4.833227 & 4.192472 \\ \hline 11 & 8.760477 & 8.306414 & 7.886875 & 7.498674 & 7.138964 & 6.805191 & 6.495061 & 5.937699 & 5.452733 & 5.028644 & 4.327060 \\ \hline 12 & 9.385074 & 8.863252 & 8.383844 & 7.942686 & 7.536078 & 7.160725 & 6.813692 & 6.194374 & 5.660292 & 5.197107 & 4.439217 \\ \hline 13 & 9.985648 & 9.393573 & 8.852683 & 8.357651 & 7.903776 & 7.486904 & 7.103356 & 6.423548 & 5.842362 & 5.342334 & 4.532681 \\ \hline 14 & 10.563123 & 9.898641 & 9.294984 & 8.745468 & 8.244237 & 7.786150 & 7.366687 & 6.628168 & 6.002072 & 5.467529 & 4.610567 \\ \hline 15 & 11.118387 & 10.379658 & 9.712249 & 9.107914 & 8.559479 & 8.060688 & 7.606080 & 6.810864 & 6.142168 & 5.575456 & 4.675473 \\ \hline 16 & 11.652296 & 10.837770 & 10.105895 & 9.446649 & 8.851369 & 8.312558 & 7.823709 & 6.973986 & 6.265060 & 5.668497 & 4.729561 \\ \hline 17 & 12.165669 & 11.274066 & 10.477260 & 9.763223 & 9.121638 & 8.543631 & 8.021553 & 7.119630 & 6.372859 & 5.748704 & 4.774634 \\ \hline 18 & 12.659297 & 11.689587 & 10.827603 & 10.059087 & 9.371887 & 8.755625 & 8.201412 & 7.249670 & 6.467420 & 5.817848 & 4.812195 \\ \hline 19 & 13.133939 & 12.085321 & 11.158116 & 10.335595 & 9.603599 & 8.905115 & 8.364920 & 7.365777 & 6.550369 & 5.877455 & 4.843496 \\ \hline 20 & 13.590326 & 12.462210 & 11.469921 & 10.594014 & 9.818147 & 9.128546 & 8.513564 & 7.469444 & 6.623131 & 5.928841 & 4.869580 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|} \hlinen & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 12% & 14% & 16% & 20% \\ \hline 1 & 0.961538 & 0.952381 & 0.943396 & 0.934579 & 0.925926 & 0.917431 & 0.909091 & 0.892857 & 0.877193 & 0.862069 & 0.833333 \\ \hline 2 & 0.924556 & 0.907029 & 0.889996 & 0.873439 & 0.857339 & 0.841680 & 0.826446 & 0.797194 & 0.769468 & 0.743163 & 0.694444 \\ \hline 3 & 0.888996 & 0.863838 & 0.839619 & 0.816298 & 0.793832 & 0.772183 & 0.751315 & 0.711780 & 0.674972 & 0.640658 & 0.578704 \\ \hline 4 & 0.854804 & 0.822702 & 0.792094 & 0.762895 & 0.735030 & 0.708425 & 0.683013 & 0.635518 & 0.592080 & 0.552291 & 0.482253 \\ \hline 5 & 0.821927 & 0.783526 & 0.747258 & 0.712986 & 0.680583 & 0.649931 & 0.620921 & 0.567427 & 0.519369 & 0.476113 & 0.401878 \\ \hline 6 & 0.790315 & 0.746215 & 0.704961 & 0.666342 & 0.630170 & 0.596267 & 0.564474 & 0.506631 & 0.455587 & 0.410442 & 0.334898 \\ \hline 7 & 0.759918 & 0.710681 & 0.665057 & 0.622750 & 0.583490 & 0.547034 & 0.513158 & 0.452349 & 0.399637 & 0.353830 & 0.279082 \\ \hline 8 & 0.730690 & 0.676839 & 0.627412 & 0.582009 & 0.540269 & 0.501866 & 0.466507 & 0.403883 & 0.350559 & 0.305025 & 0.232568 \\ \hline 9 & 0.702587 & 0.644609 & 0.591898 & 0.543934 & 0.500249 & 0.460428 & 0.424098 & 0.360610 & 0.307508 & 0.262953 & 0.193807 \\ \hline 10 & 0.675564 & 0.613913 & 0.558395 & 0.508349 & 0.463193 & 0.422411 & 0.385543 & 0.321973 & 0.269744 & 0.226684 & 0.161506 \\ \hline 11 & 0.649581 & 0.584679 & 0.526788 & 0.475093 & 0.428883 & 0.387533 & 0.350494 & 0.287476 & 0.236617 & 0.195417 & 0.134588 \\ \hline 12 & 0.624597 & 0.556837 & 0.496969 & 0.444012 & 0.397114 & 0.355535 & 0.318631 & 0.256675 & 0.207559 & 0.168463 & 0.112157 \\ \hline 13 & 0.600574 & 0.530321 & 0.468839 & 0.414964 & 0.367698 & 0.326179 & 0.289664 & 0.229174 & 0.182069 & 0.145227 & 0.093464 \\ \hline 14 & 0.577475 & 0.505068 & 0.442301 & 0.387817 & 0.340461 & 0.299246 & 0.263331 & 0.204620 & 0.159710 & 0.125195 & 0.077887 \\ \hline 15 & 0.555265 & 0.481017 & 0.417265 & 0.362446 & 0.315242 & 0.274538 & 0.239392 & 0.182696 & 0.140096 & 0.107927 & 0.064905 \\ \hline 16 & 0.533908 & 0.458112 & 0.393646 & 0.338735 & 0.291890 & 0.251870 & 0.217629 & 0.163122 & 0.122892 & 0.093041 & 0.054088 \\ \hline 17 & 0.513373 & 0.436297 & 0.371364 & 0.316574 & 0.270269 & 0.231073 & 0.197845 & 0.145644 & 0.107800 & 0.080207 & 0.045073 \\ \hline 18 & 0.493628 & 0.415521 & 0.350344 & 0.295864 & 0.250249 & 0.211994 & 0.179859 & 0.130040 & 0.094561 & 0.069144 & 0.037561 \\ \hline 19 & 0.474642 & 0.395734 & 0.330513 & 0.276508 & 0.231712 & 0.194490 & 0.163508 & 0.116107 & 0.082948 & 0.059607 & 0.031301 \\ \hline 20 & 0.456387 & 0.376889 & 0.311805 & 0.258419 & 0.214548 & 0.178431 & 0.148644 & 0.103667 & 0.072762 & 0.051385 & 0.026084 \\ \hline \end{tabular}