Carlos owns and operates a restaurant. To help expand his business, Carlos is considering the feasibility of offering a wedding catering service. To open this service, Carlos needs a van to deliver his food to the various weddings. After doing some research and price-checking, he has found a suitable new van online costing $45,000. Carlos will make a 25% down payment and finance the rest of the van with an amortized loan over 5 years at a 6.5% interest rate. Carlos predicts that by catering approximately 8 weddings a year at about $5,000 per wedding, he will increase his operating receipts by $40,000 per year. However, his operating expenses such as food, fuel, labor and insurance will increase by approximately $25,000 per year. Carlos assumed a straight-line depreciation over 8 years and the life of the investment is 5 years. The terminal value of the van is $30,000 after the 5 years, and Carlos requires a pretax 9% rate of return to capital. The marginal tax rate over the next 7 years is 23%. Welcome to Pampa State University. Your faculty members rock along doing their own thing. They are teaching, researching, and serving on committees, but generally keeping their heads down and working. Then, word comes down from the leadership that all faculty will now need to park at the university farm and ride a bus into the main campus, adding 10 minutes to their commutes. They are MAD. They are now activated on this particular issue, but aren't worried about other campus issues. (This is fictitious.)