Determining net cash flows for a new boat Jan and Deana have been dreaming about owning a boat for some time and have decided that estimating its cash flows will help them in their decision process. They expect to have a disposable annual income of $24,500. Their cash flow estimates for the boat purchase are as follows: Negotiated price of the new boat Sales tax rate (applicable to purchase price) Boat trade-in Estimated value of new boat in 4 years Estimated monthly repair and maintenance Estimated monthly docking fee $70,100 6.4% $0 $40,000 $780 $481 Using these cash flow estimates, calculate the following: a. The initial investment. b. Operating cash flow. c. Terminal cash flow. d. Summary of annual cash flow. (Note: Assume that Jan and Deana plan on selling the boat in 4 years.) e. On the basis on their disposable annual income, what advice would you give Jan and Deana regarding the proposed boat purchase? a. The initial investment is $ . (Round to the nearest dollar. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) b. The operating cash flow is $ (Round to the nearest dollar. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) c. The terminal cash flow is $ . (Round to the nearest dollar. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) d. The annual cash flows are: (Round to the nearest dollar. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) Year 0 Year 1 Year 2 Year 3 Year 4 Cash flow $ e. On the basis on their disposable annual income, what advice would you give Jan and Deana regarding the proposed boat purchase? "We would recommend that Jan and Deana obtain a loan to cover the initial negative cash flow payable in 4 years." Is the above statement true or false? (1) (Select from the drop-down menu.) (1) O False False True