Adams Company is considering investing in two new vans that are expected to generate combined cash inflows of $35,000 per year. The vans' combined purchase price is $92,500. The expected life and salvage value of each are eight years and $21,700, respectively. Adams has an average cost of capital of 10 percent. (PV of $1andPVA of $1)

a. Calculate the net present value of the investment opportunity

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.