Thornton Company is considering investing in two new vans that are expected to generate combined cash inflows of $29,500 per year. The vans' combined purchase price is $99,500. The expected life and salvage value of each are seven years and $22,000, respectively. Thornton has an average cost of capital of 12 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? Above Accepted Thornton Company has an opportunity to purchase a forklift to use in its heavy equipment rental business. The forklift would be leased on an annual basis during its first two years of operation. Thereafter, it would be leased to the general public on demand. Thornton would sell it at the end of the fifth year of its useful life. The expected cash inflows and outflows follow. Cash Inflow Cash Outflow $93, 400 Year 2018 2018 2019 2020 2020 2021 2022 2022 Nature of Item Purchase price Revenue Revenue Revenue Major overhaul Revenue Revenue Salvage value $38,000 38,000 27,000 9,600 24,000 22,000 8,400 Required a.&b. Determine the payback period using the accumulated and average cash flows approaches. (Round your answers to 1 decimal place.) years a. Payback period (accumulated cash flows) b. Payback period (average cash flows) years