The vans combined purchase price is 91000 the expected life

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Reference no: EM13595527

The van's combined purchase price is $91,000. The expected life and salvage value of each are four years and $21,000, respectively. Metro Shuttle has an average cost of capital of 14 percent.

a. Calculate the net present value of the investment opportunity

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.

Reference no: EM13595527

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