Blossom Florist is considering the purchase of an additional van. If they invest in

another van they could deliver twice as many orders and therefore increase

revenues by $20,000 per year. The van will cost $40,000. It has a five year

expected life (class-life). Dealer's delivery cost is $500 and some modifications

to the van will cost $250. There will be an increase in inventory of $750

if the van is purchased. An additional delivery person will be needed who will be

paid $5,000 per year for the part-time work. The gas for the van will be $1,000

per year. The maintenance expense for the van will be $750 per year. At the

end of 3 years, the van is expected to be sold to a used car dealer for $25,000.

The firm's marginal tax rate is 34% and its' WACC is 9%. The company uses

straight-line depreciation. Should they purchase the van?

Please solve using Excel.