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HW 140 Saw 2 Kent Duncan is exploring the possibility of opening a self-service car wash and operating it for the next five years until

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HW 140 Saw 2 Kent Duncan is exploring the possibility of opening a self-service car wash and operating it for the next five years until he retires. He has gathered the following information 6 point 2 G0641 a. A building in which a car wash could be installed is available under a five-year lease at a cost of $3,700 per month b. Purchase and installation costs of equipment would total $255,000 in five years the equipment could be sold for about 10% of its original cost An investment of an additional $4,000 would be required to cover working capital needs for cleaning supplies, change funds, and so forth. After five years, this working capital would be released for investment elsewhere. d. Both a wash and a vacuum service would be offered Each customer would pay $152 for a wash and $ 85 for access to a vacuum cleaner e. The only variable costs associated with the operation would be 75 cents per wash for water and 10 cents per use of the vacuum for electricity In addition to rent monthly costs of operation would be cleaning. $2,200 insurance, $75, and maintenance, S1685 9. Gross receipts from the wash would be about 52.432 per week. According to the experience of other car washes, 60% of the customers using the wash would also use the vacuum eBook Print Pletences Mr. Duncan will not open the car wash unless it provides at least a 12% return Click here to view Exhibe 148-1 and Exhibit 148 2. to determine the appropriate discount factors) using tables. Required: 1 Assuming that the car wash will be open 52 weeks a year, compute the expected annual net cash receipts from its operation 2a. What is the net present value of the investment in the car wash? 2-5 Would you advise Mr. Duncan to open the car wash? Complete this question by entering your answers in the tabs below. Rea 1 Red 2A Raq 21 Aiming that the car wash will be open 52 weeks a year, compate the expected annual net cash receipts from its operation. 13 Acha wananchi Vacun cash receipts Totalca receita 125 464 42.412 168.896 Me hoducation.com/ext/map/index.html con con external browser0&launchUnhttp%253 Gewed HW 14 2 Kent Duncan is exploring the possibility of opening a self-service car wash and operating it for the next five years until he retites. He has gathered the following information 6 pot 03.0424 a. A building in which a car wash could be installed is available under a five-year lease at a cost of $3,700 per month b. Purchase and installation costs of equipment would total $255,000. In five years the equipment could be sold for about 10% of its original cost c An investment of an additional $4,000 would be required to cover working capital needs for cleaning supplies, change funds, and so forth. After five years, this working capital would be released for investment elsewhere. d. Both a wash and a vacuum service would be offered. Each customer would pay $1.52 for a wash and 5.85 for access to a vacuum cleaner e The only variable costs associated with the operation would be 75 cents per wash for water and 10 cents per use of the vacuum for electricity f. In addition to rent monthly costs of operation would be cleaning, $2,200, Insurance, S75, and maintenance, $1685 g. Gross receipts from the wash would be about $2.432 per week. According to the experience of other car washes, 60% of the customers using the wash would also use the vacuum. eho Print References Mr. Duncan will not open the car wash unless it provides at least a 12% return Click here to view Exhibit 1484 and Exhibit:148-2. to determine the appropriate discount factor(s) using tables Required: 1 Assuming that the car wash will be open 52 weeks a year, compute the expected annual net cash receipts from its operation 2a. What is the net present value of the investment in the car wash? 25 Would you advise Mr. Puncan to open the car wash? Complete this question by entering your answers in the tabs below. RA Reg 2A Reg 28 Wat is the net present value of the investment in the car wash (Enter negative amount with a minus sign Round your final et to the nearest whole dollar amount.) valen

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