Jennifer's Pet Shop is considering the purchase of a new delivery van. Jennifer Smith, owner of the shop, has compiled the following estimates in trying to determine whether the delivery van should be purchased: Cost of the van $41,100 Annual net cash flows 6,950 Salvage value 4,950 Estimated useful life 8 years Cost of capital 10% Present value of an annuity of 1 5.33493 Present value of 1 0.46651 Jennifer's assistant manager is trying to convince Jennifer that the van has other benefits that she hasn't considered in the initial estimates. These additional benefits, including the free advertising the store's name painted on the van's doors will provide, are expected to increase net cash flows by $520 each year. TABLE 3 Present Value of 1 (11) Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 .96154 .95238 94340 0.93458 .92593 .91743 11 23456789012345 .90909 .90090 .89286 .92456 .86957 .90703 89000 0.87344 .85734 .84168 .82645 .81162 79719 .88900 .86384 .75614 .83962 0.81630 .79383 .77218 .85480 .82270 .79209 0.76290 .73503 .70843 .75132 .68301 .65873 .73119 .71178 .65752 .63552 .57175 .82193 .78353 74726 0.71299 .68058 .64993 .62092 .59345 .56743 .49718 .79031 .74622 .75992 .50507 .70496 .71068 .66506 0.62275 .58349 .73069 .67684 .62741 0.58201 .54027 .70259 .64461 .59190 0.54393 .67556 .61391 .55839 .64958 .58468 .52679 .62460 .55684 .49697 0.44401 .60057 .53032 .57748 0.66634 .63017 .59627 .56447 .54703 .51316 .53464 .50663 .43233 .48166 .45235 .37594 .50187 .46651 43393 .40388 .32690 .50025 46043 .42410 .39092 .36061 .28426 0.50835 .46319 .42241 .38554 .35218 .32197 .24719 0.47509 .42888 .38753 .35049 .31728 .28748 .21494 .39711 .35554 .31863 .28584 25668 .18691 .46884 0.41496 .36770 .32618 .28966 25751 44230 0.38782 .34046 .29925 .26333 .23199 .55526 .48102 .41727 0.36245 .31524 .27454 .23939 .20900 22917 .20462 .14133 .18270 .12289 .16253 16 .53391 .45811 .39365 0.33873 .29189 .25187 .21763 .18829 .16312 .10687 17 .51337 .43630 .37136 0.31657 27027 .23107 .19785 .16963 .14564 .09293 18 .49363 .41552 .35034 0.29586 .25025 .21199 .17986 .15282 13004 .08081 19 474641 .39573 .33051 0.27615 .23171 .19449 .16351 .13768 .11611 .07027 20 .45639 .37689 31180 0.25842 .21455 .17843 .14864 .12403 .10367 .06110 BLE 4 Present Value of an Annuity of 1 TABLE 4 Present Value of an Annuity of 1 2345 (11) Payments 4% 5% 6% 1 .96154 .95238 .94340 1.88609 2.77509 3.62990 4.45182 4.32948 6 5.24214 5.07569 6.00205 5.78637 8 6.73274 6.46321 9 7.43533 7.10782 10 8.11090 7.72173 11 8.76048 8.30641 12 9.38507 8.86325 13 9.98565 9.39357 14 10.56312 9.89864 15 16 17 18 19 20 67 8% 9% 10% 11% 15% 2.40183 2.28323 3.03735 2.85498 12% 7% .90090 .89286. .86957 .90909 .92593 .91743 0.93458 1.73554 1.71252 1.69005 1.62571 1.85941 1.83339 1.80802 1.78326 1.75911 2.72325 2.67301 2.62432 2.57710 2.53130 2.48685 2.44371 3.54595 3.46511 3.31213 3.23972 3.16986 3.10245 3.38721 3.60478 3.35216 3.88965 3.79079 3.69590 4.10020 3.99271 4.21236 4.91732 4.76654 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448 5.58238 5.38929 5.20637 5.03295 4.86842 4.71220 4.56376 4.16042 6.20979 5.97130 5.74664 5.53482 5.33493 5.14612 4.96764 4.48732 6.80169 6.51523 6.24689 5.99525 5.75902 5.53705 5.32825 4.77158 7.02358 6.71008 6.41766 6.14457 5.88923 5.65022 5.01877 7.36009 7.88687 7.49867 7.13896 6.80519 6.49506 6.20652 5.93770 5.23371 8.38384 7.94269 7.53608 7.16073 6.81369 6.49236 6.19437 5.42062 8.85268 8.35765 7.90378 7.48690 7.10336 6.74987 6.42355 5.58315 9.29498 8.74547 8.24424 7.78615 7.36669 6.98187 6.62817 5.72448 9.71225 9.10791 8.55948 8.06069 7.60608 7.19087 6.81086 5.84737 11.11839 10.37966 9.44665 8.85137 8.31256 7.82371 7.37916 6.97399 5.95424 11.65230. 10.83777 10.10590 8.02155 7.54879 7.11963 6.04716 9.76322 9.12164 8.54363 12.16567 11.27407 10.47726 10.05909 9.37189 8.75563 8.20141 7.70162 7.24967 6.12797 12.65930 11.68959 10.82760 10.33560 9.60360 8.95012 8.36492 7.83929 7.36578 6.19823 13.13394 12.08532 11.15812- 10.59401 9.81815 9.12855 8.51356 7.96333 7.46944 6.25933 13.59033 12.46221 11.46992 (a) Calculate the net present value of the van, based on the initial estimates. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to O decimal places, e.g. 5,275.) Net present value $ Should the van be purchased? Van be purchased