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Fanning Company is considering investing in two new vans that are expected to generate combined cash inflows of $26.000 per year The vans' combined purchase
Fanning Company is considering investing in two new vans that are expected to generate combined cash inflows of $26.000 per year The vans' combined purchase price is $90,000. The expected life and salvage value of each are five years and $21,400, respectively Fanning has an average cost of capital of 12 percent (PV of $i 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 Answer is complete but not entirely correct. a b Net present value Will the return be above or below the cost of capital? Should the investment opportunity be accepted? $ 15,86712 Above Accepted
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