Carlos owns and pperates a restaurane. To help cepand kis baslness. Carks is cochldering the feasibility of ottering a wedding catering service. To open this service. Carlos needs a vas to delwer his food to the various weddings. After doing some research and price-checking, he has found a subible newr vin coline costing \$45,000. Carios wall make a 25% down parment and france. the rest of the van with an amortiand lase over 5 years at a 6.5 interest rate. Carlos predicts that by catering appeovimately 8 woddines a vear at about $5,000 per weddhe he will increave his eperating receipts by $40,000 per peac. However, his operatine expenes soch as food, fuet, Labor and insurance will increase by approximately \$25,000 per vear. Cados assumed a straightIne depreciabion over 6 yean and the lfe of the imvestment is 5 wan. The termiral value of the van is $30,000 after the 5 yeirs, and Carlos reguires a pretax 95 rate of retien to eapital. The marginal tax rate over the next 7 vess b. 23%. (i) What is the appropriate discount rate to calculate the NPV in this problem? a. .5.5% b. 6.93% trter respoens here (a) What is the initial cost for the service? 2. $45,000 b. 5,37,500 c. $38.000 I 1533,750 (i) What is the appropriate discount rate to calculate the NPV in this problem? a. 6.5% b. 6.93% enter response here (ii) What is the initial cost for the service? a. $45,000 b. $,37,500 c. $38,000 d. $33,750 enter response here (iii) What is the yearly allowable depreciation using the straight-line method? a. $7,000 *b. $,5,625 c. $6,500 d. $6,250 enter response here (iv) What are the yearly after-tax net returns? a. $12,000 b. $15,000 c. $9,240 d. $11,550 enter response here (v) What is the after-tax terminal value? a. $26,981,25 b. $30,000 c. $27,412.50 d. $27,500.50 enter response here (vi) What is the NPV? a. $27,061.07 b. $13,470.83 c. $13,789.98 d. $26,928.56 enter response here (vii) What is the maximum operating expense for food, fuel, labor and insurance that can be spent on this investment and still be a good investment. a. $33,558 b. $34,263 c. $27,506 d. $35,695 enter response here