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(Ignore income taxes in this problem.) Apnea Video Rental Store is considering the purchase of an almost new minivan to use as a vehicle to deliver...
.(Ignore income taxes in this problem.) Apnea Video Rental Store is considering the purchase of an almost new minivan to use as a vehicle to deliver and pick up video tapes for customers. The minivan will cost $18,000 and is expected to last 8 years but only if the engine is overhauled at a cost of $3,000 at the end of year 3. The minivan is expected to have a $1,000 salvage value at the end of 8 years. This delivery service is expected to generate net cash inflows of $6,000 per year in each of the 8 years. Apnea's discount rate is 14%. What is the net present value of this investment opportunity? A) $(2,826) B) $(3,801) C) $7,185 D) $8,160 E) None of the above 42
