Christina Company will purchase a van for $40,000. It will have a depreciable life of 5 years and a terminal salvage value of $10,000. Assume a tax rate of 20% and a required after-tax rate of return of 12%. The company uses straight-line depreciation for tax purposes. The annual cash operating savings at the end of each year, exclusive of depreciation, are $10,000 for five years. The present value of one for five periods at 12% is 0.5674. The present value of an ordinary annuity of one for five periods at 12% is 3.6048. What is the net present value of the van ? $(5, 394) $(1, 162) $11, 909 $17, 583 A plant asset of $270,000 is expected to generate $180,000 in operating cash savings (excluding depreciation expense) annually for three years. Assume straight-line depreciation is used. The useful life is three years. The asset has no expected residual value. Ignore income taxes. The accounting rate of return based on the average investment is 11.11% 33.33% 44.44% 66.67%