Delta Dawns Bakery is considering purchasing a new van to deliver bread. The van will cost $16,000. Two-thirds ($10,667) of this cost will be borrowed. The loan is to be repaid with four equal annual payments (first payment at t = 1) based on an interest rate of 4 %/year. It is anticipated that the van will be used for 6 years and then sold for a salvage value of $2,000. Annual operating and maintenance expenses for the van over the 6-year life are estimated to be $700 per year. If the van is purchased, Delta will realize a cost savings of $4,400 per year. Delta uses a MARR of 6 %/year

What is the present worth of the van?

Based on the present worth analysis, is the purchase of the van economically attractive?