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Blaze Scooters is considering expanding into a new college town and has the following operating data: Initial Investment in scooters (year 0): $107563 Cost of

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Blaze Scooters is considering expanding into a new college town and has the following operating data: Initial Investment in scooters (year 0): \$107563 Cost of securing permits (assume that permit cost is a tax-deductible expense in year 1 ): $10398 Anticipated Revenue: \$198685 for years 1-5. Depreciation of scooters - straight line down to 0 over 5 years. Operating expenses (not including Depreciation): $77855 per year. Tax Rate: 24%. Net Working Capital, consisting of cash, spare parts inventory, accounts receivable, and accounts payable: $30,000. Blaze expects to be able to recoup 100% of Net Working if they shut down. Assume that investment in working capital occurs in year 0 at the start of the project. Scrap value of scooters at the end of 5 years: $20,000. (remember that any capital gains when selling are taxable) Assume that Blaze makes the necessary investments, operates for 5 years, and then shuts down, selling the scooters for scrap and recouping Net Workina Capital. What are their expected after-tax cash flows for year 2 rounded to the nearest cent (.01)? QUESTION 2 Blaze Scooters is considering expanding into a new college town and has the following operating data: Initial Investment in scooters (year 0): \$102617 Cost of securing permits (assume that permit cost is a tax-deductible expense in year 1 ): $8846 Anticipated Revenue: $156827 for years 1-5. Depreciation of scooters - straight line down to 0 over 5 years. Operating expenses (not including Depreciation): \$75194 per year. Tax Rate: 18%. Net Working Capital, consisting of cash, spare parts inventory, accounts receivable, and accounts payable: $34813. Blaze expects to be able to recoup 100% of Net Working if they shut down. Assume that investment in working capital occurs in year 0 at the start of the project. Scrap value of scooters at the end of 5 years: \$22321. (remember that any capital gains when selling are taxable) Assume that Blaze makes the necessary investments, operates for 5 years, and then shuts down, selling the scooters for scrap and recouping Net Workina Capital. What are their expected after-tax cash flows for year 5 rounded to the nearest cent (.01)

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