Rooney Company is considering investing in two new vans that are expected to generate combined cash inflows of $28,500 per year. The vans' combined purchase price is $93,000. The expected life and salvage value of each are six years and $20,500, respectively. Rooney has an average cost of capital of 14 percent. (PV of $1 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. a. Net present value b. Will the return be above or below the cost of capital? Should the investment opportunity be accepted? TABLE 1 PRESENT VALUE OF $1 n 4% 6% 7% 9% 10% 12% 14% 16% 20% 1 0.877193 2. 0.769468 3 4 0.917431 0.841680 0.772 183 0.708425 0.649931 0.596267 0.547034 0.501866 5 6 7 S 9 0.961535 0.924556 O.SS5996 0.854504 0.821927 0.790315 0.759918 0.730690 0.702587 0.675564 0.649551 0.624597 0.600574 0.577475 0.555265 0.53390S 0.513373 0.493628 0.460428 0.934579 0.873439 0.816295 0.762895 0.712986 0.666342 0.622750 0.582009 0.543934 0.508 349 0.475093 0.444012 0.414964 0.387817 0.362446 0.338735 5% 0.952381 0.907029 0.863835 0.522702 0.783526 0.746215 0.710681 0.676839 0.644609 0.613913 0.584679 0.556837 0.530321 0.50506S 0.481017 0.458112 0.436297 0.415521 0.395734 0.376889 10 0.943396 0.889996 0.839619 0.792094 0.747255 0.704961 0.665057 0.627412 0.591 89S 0.558395 0.526785 0.496969 0.468839 0.442301 0.417265 0.393646 0.371364 0.350344 0.330513 0.31 1805 8% 0.925926 0.857339 0.793832 0.735030 0.680583 0.630170 0.583490 0.540269 0.500249 0.463193 0.428883 0.397114 0.367698 0.340461 0.315242 0.291 890 0.270269 0.250249 0.231712 0.214548 0.909091 0.826446 0.751315 0.683013 0.620921 0.564474 0.513155 0.466507 0.424098 0.385543 0.350494 0.315631 0.289664 0.263331 0.239392 0.217629 0.197845 0.179859 0.163505 0.145644 0.892857 0.797194 0.711750 0.635518 0.567427 0.506631 0.452349 0.403883 0.360610 0.321973 0.287476 0.256675 0.229174 0.204620 0.182696 0.163122 0.145644 0.130040 0.116107 0.103667 0.422411 0.387533 0.355535 0.326179 0.299246 0.274538 0.251870 0.862069 0.743163 0.640655 0.552291 0.476113 0.410442 0.353830 0.305025 0.262953 0.226684 0.195417 0.168463 0.145227 0.125195 0.107927 0.093041 0.080207 0.069144 0.059607 0.051385 0.674972 0.592080 0.519369 0.455587 0.399637 0.350559 0.307508 0.269744 0.236617 0.207559 0.182069 0.159710 0.140096 0.122892 0.107800 0.094561 0.082948 0.072762 11 0.833333 0.694444 0.578704 0.482253 0.401875 0.334898 0.279082 0.232565 0.193807 0.161506 0.1345SS 0.112157 0.093464 0.077887 0.064905 0.0540SS 0.045073 0.037561 0.031301 0.026084 12 13 14 15 16 17 18 0.316574 0.295564 0.27650S 0.258419 0.231073 0.211994 0.194490 0.175431 19 0.474642 0.456387 20 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 6% 7% 1 4% 0.961535 1.586095 2.775091 2 3 4 3.629895 4.451822 5 6 7 S 9 10 5% 0.952381 1.859410 2.723245 3.545951 4.329477 5.075692 5.786373 6.463213 7.107822 7.72 1735 8.306414 S.563252 9.393573 9.898641 10.379658 10.837770 11.274066 11.689557 12.085321 12.462210 0.943396 1.833393 2.673012 3.465106 4.212364 4.917324 5.582351 6.209794 6.S01692 7.360087 7.886875 S.383544 S.S52683 9.294994 9.712249 10.105895 10.477260 10.827603 11.158116 11.469921 5.242137 6.002055 6.732745 7.435332 S.110896 8.760477 9.385074 9.985648 10.563123 11.118357 11.652296 12.165669 12.659297 13.133939 13.590326 0.934579 1. SOSOIS 2.624316 3.387211 4.100197 4.766540 5.389259 5.971299 6.515232 7.023582 7.495674 7.942686 S.357651 8.74546S 9.107914 9.446649 9.763223 10.059087 10.335595 10.594014 8% 0.925926 1.783265 2.577097 3.312127 3.992710 4.622880 5.206370 5.746639 6.246SSS 6.710051 7.138964 7.536075 7.903776 8.244237 8.559479 8.851369 9.121638 9.371 SS7 9.603599 9.S18147 9% 0.917431 1.759111 2.531295 3.239720 3.889651 4.485919 5.032953 5.534819 5.995247 6.417658 6.S05191 7.160725 7.486904 7.786150 8.0606SS 8.312558 8.543631 8.755625 8.905115 9.128546 10% 0.909091 1.735537 2.486852 3.169565 3.790787 4.355261 4.868419 5.334926 5.759024 6.144567 6.495061 6.813692 7.103356 7.366687 7.606080 7.823709 8.021553 S.201412 8.364920 8.513564 12% 0.892857 1.690051 2.401831 3.037349 3.604776 4.111407 4.563757 4.967640 5.328250 5.650223 5.937699 6.194374 6.423548 6.628168 6.S10864 6.973986 7.119630 7.249670 7.365777 7.469444 14% 0.577193 1.646661 2.321632 2.913712 3.433081 3.SSS66S 4.288305 4.638564 4.946372 5.216116 5.452733 5.660292 5.842362 6.002072 6.142168 6.265060 6.372859 6.467420 6.550369 6.623131 16% 20% 0.562069 0.833333 1.605232 1.527778 2.245890 2.106481 2.79SISI 2.585735 3.274294 2.990612 3.684736 3.325510 4.038565 3.604592 4.343591 3.837160 4.606544 4.030967 4.833227 4.192472 5.028644 4.327060 5.197107 4.439217 5.342334 4.532681 5.467529 4.610567 5.575456 4.675473 5.668497 4.729561 5.748704 4.774634 5.817848 4.812195 5.877455 4.843496 5.928841 4.869580 11 12 13 14 15 16 17 18 19 20