Munoz Company is considering investing in two new vans that are expected to generate combined cash inflows of $$31,000$ per year.

The vans' combined purchase price is $$91,500.$ The expected life and salvage value of each are seven years and $$20,900,$

respectively. Munoz has an average cost of capital of $14$ percent. $($PV of $$1$ and PVA of $$1)$

Note: Use appropriate factor$($s$)$ from the tables provided.

Required

a$.$ Calculate the net present value of the investment opportunity.

Note: 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.

a$.$ Net present value

b$.$ Will the return be above or below the cost of capital?

b$.$ Should the investment opportunity be accepted?