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22) Evaluation of capital budgeting projects (15 points) A pizza franchise is looking to buy new delivery cars. The franchise owner is considering two similar

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22) Evaluation of capital budgeting projects (15 points) A pizza franchise is looking to buy new delivery cars. The franchise owner is considering two similar in size models: 2019 Kia Rio for $18,000 or 2019 Ford Fiesta for $15,000. Both models will be used for 10 years, then written off (will have 50 value). Kia Rio averages 35 miles/gallon. Ford Fiesta averages 30 miles/gallon. Regardless of the model, the store expects to put around 12,000 miles per year on each vehicle it owns over the next 10 years. If the firm's weighted average cost of capital is 9% APR, gas is expected to cost around $2.50/gallon, and the owner is planning to buy additional warranty for his vehicles that will cover any needed repairs at a cost of $800/year for Kia Rio and $1000/year for Ford Fiesta, which model should the franchise purchase and why? Make sure to provide quantitative evidence to support your recommendation

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