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Exercise 10-5A Determining net present value Monterey Company is considering investing in two new vans that are expected to generate combined cash inflows of $30,000
Exercise 10-5A Determining net present value Monterey Company is considering investing in two new vans that are expected to generate combined cash inflows of $30,000 per year. The vans' combined purchase price is $93,000. The expected life and salvage value of each are four years and $23,000, respectively. Monterey has an average cost of capital of 7 percent. Required Round your figures to two decimal points. a. Calculate the net present value of the investment opportunity. 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
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