Calculate net present value of the investment opportunity

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Question: Monterey Company is considering investing in two new vans that are expected to generate combined cash inflows of $30,000 per year. The vans' combined purchase price is $93,000. The expected life and salvage value of each are four years and $23,000, respectively. Monterey has an average cost of capital of 7 percent. (PV of $1 and PVA of $1) Note: Use appropriate factor(s) from the tables provided.

Required 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. 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. Get expert-level assistance in any subject with our assignment help services.

Reference no: EM133926369

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