Callaghan Company is considering investing in two new vans that are expected to generate combined cash inflows of $28,000 per year. The vans combined purchase price is $94,500. The expected life and salvage value of each are five years and $21,100, respectively. Callaghan has an average cost of capital of 14 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Required

a.	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.)

b-1.

Indicate whether the investment opportunity is expected to earn a return that is above or below the cost of capital.

	Above
	Below

b-2.

Based on your answer in Requirement b-1, should the investment opportunity be accepted.

	Accepted
	Rejected