Determining net present value. Brett Dunlop is seeking part-time employment while he attends school.He is considering purchasing technical equipment tat will enable him to start a small training service company that will offer tutorial services over internet.Brett expects demand for the service to grow rapidly in the first two years of operation as customers learn about the availability of the internet assistance. Thereafter, he expects demand to stabilize. The following table presents the expected cash flows.

year of operation	cash inflow	cash outflow
2015	$15,000	$10,000
2016	19,000	12,000
2017	23,000	12,600
2018	25,000	12,600

In adition to these cash flows, Mr.Dunlop expects to pay $21,000 for the equipment.He also expects to pay $3,600 for a major overhaul and updating of the equipment at the end of the second year of operation. The wquipment is expected to have a $1,500 salvage value and a four year useful life, Mr. Dunlop desires to earn a rate of return of 8 percent.

Required:

a) Calculate the net present value of the investment oportunity .

b)Indicate whether the investment opportunity is expected to earn a return that is above or below the desired rate of return and wheter it should be accepted.