Can you solve the net present value

TABLE 1 PRESENT VALUE OF $1 n 14% 1 4% 0.961538 0.924556 5% 0.952381 0.907029 0.863838 7% 0.934579 0.873439 0.816298 8% 0.925926 0.857339 0.793832 10% 0.909091 0.826446 0.751315 2 12% 0.892857 0.797194 0.711780 0.635518 20% 0.833333 0.694444 0.578704 0.482253 3 16% 0.862069 0.743163 0.640658 0.552291 0.476113 0.888996 4 0.854804 0.822702 6% 0.943396 0.889996 0.839619 0.792094 0.747258 0.704961 0.665057 0.627412 0.591898 0.735030 9% 0.917431 0.841680 0.772183 0.708425 0.649931 0.596267 0.547034 0.501866 0.460428 0.762895 0.712986 0.877193 0.769468 0.674972 0.592080 0.519369 0.455587 0.399637 5 0.821927 0.680583 0.683013 0.620921 0.564474 0.567427 0.401878 6 0.783526 0.746215 0.710681 0.666342 0.630170 0.506631 0.790315 0.759918 0.334898 0.410442 0.353830 7 0.622750 0.583490 0.513158 0.452349 0.279082 0.232568 8 0.582009 0.540269 0.466507 0.403883 0.350559 0.305025 0.730690 0.702587 0.676839 0.644609 9 0.543934 0.500249 0.424098 0.193807 0.262953 0.226684 10 0.675564 0.558395 0.508349 0.422411 0.161506 0.613913 0.584679 0.556837 11 0.360610 0.321973 0.287476 0.256675 0.649581 0.624597 0.307508 0.269744 0.236617 0.207559 0.463193 0.428883 0.397114 0.526788 0.496969 0.475093 0.444012 0.385543 0.350494 0.318631 0.387533 0.355535 0.195417 0.168463 0.134588 0.112157 12 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 n 4% 5% 6% 10% 12% 14% 1 0.961538 8% 0.925926 1.783265 7% 0.934579 1.808018 2.624316 3.387211 9% 0.917431 1.759111 2.531295 0.909091 1.735537 0.877193 1.646661 16% 0.862069 1.605232 2 1.886095 3 2.486852 2.245890 2.775091 3.629895 2.577097 3.312127 4 5 0.952381 1.859410 2.723248 3.545951 4.329477 5.075692 5.786373 6.463213 7.107822 7.721735 4.451822 5.242137 6.002055 6.732745 0.943396 1.833393 2.673012 3.465106 4.212364 4.917324 5.582381 6.209794 6.801692 7.360087 6 4.100197 4.766540 5.389289 5.971299 6.515232 3.992710 4.622880 5.206370 5.746639 6.246888 6.710081 0.892857 1.690051 2.401831 3.037349 3.604776 4.111407 4.563757 4.967640 5.328250 3.239720 3.889651 4.485919 5.032953 5.534819 5.995247 6.417658 7 3.169865 3.790787 4.355261 4.868419 5.334926 5.759024 6.144567 2.321632 2.913712 3.433081 3.888668 4.288305 4.638864 4.946372 5.216116 20% 0.833333 1.527778 2.106481 2.588735 2.990612 3.325510 3.604592 3.837160 4.030967 4.192472 2.798181 3.274294 3.684736 4.038565 4.343591 4.606544 4.833227 5.028644 8 9 7.435332 8.110896 10 7.023582 5.650223 11 8.306414 7.886875 7.138964 6.805191 6.495061 5.937699 5.452733 4.327060 8.760477 9.385074 7.498674 7.942686 12 8.863252 8.383844 7.536078 6.813692 6.194374 5.660292 5.197107 4.439217 7.160725 7.486904 13 9.985648 9.393573 8.852683 8.357651 7.903776 7.103356 6.423548 5.842362 5.342334 4.532681 Exercise 10-5A Determining net present value LO 10-2 Thornton Company is considering investing in two new vans that are expected to generate combined cash inflows of $31,000 per year. The vans' combined purchase price is $97,000. The expected life and salvage value of each are six years and $20,800, respectively. Thornton has an average cost of capital of 12 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 your intermediate calculations and final answer to 2 decimal places.) 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. X Answer is complete but not entirely correct. a. $ 10,376.59 b. Net present value Will the return be above or below the cost of capital? Should the investment opportunity be accepted? Above Accepted