Greg Pratt desires to purchase a restaurant franchise from Taco Corporation. The costs associated with the franchise are as follows:

Initial fee: $15,000 Monthly royalty: 4% of gross sales Advertising fees: 2% of gross sales Pratt's Tacos is expected to have sales of $400,000 for the first year, with in- creases in years two through five of 10% per year.

Required:

Determine the franchising costs for each year (years one-five) for Greg Pratt. Assume the initial fee is paid in year one.