3. A used food truck for selling food at events costs $35,000. at the present time. You think you can earn a net return of $6,700 at the ends of years 1 through 6. The equipment will be worth $4,000 when you are done using it at the end of year 6. Calculate the net present value of the food truck investment using a discount rate of 6.5%. 4. A nice set of bounce houses and associated equipment for entertaining youngsters at events costs $28,000 at the present time. You think you can earn a net return of $6,000 at the end of year 1, $6,200 at the end of year 2, $6,400 at the end of year 3, and $6,500 at the end of year 4. The equipment will be worth $8,600 when you are done using it at the end of year 4. Calculate the net present value of the bounce house equipment using a discount rate of 6.5%. 5. Based on NPV, which investment looks better? Explain why this comparison is not a good idea. 6. Find the annuity which is equivalent each of the above investments NPV (questions 3 and 4). Based on the annuity equivalent, which investment is better? Why? 7. Based on the information so far, which one would you choose? Why? 8. Now assume that the Bounce House investment is much more risky with regard to the expected cash flows and to the salvage value of the equipment than the Food Truck is. What would you change in your analysis to compare the two investments if that were the case