Walton Company is considering investing in two new vans that are expected to generate combined cash inflows of $32,500 per year. The vans combined purchase price is $93,500. The expected life and salvage value of each are eight years and $21,100, respectively. Walton has an average cost of capital of 10 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.