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I need the correct values for each section 1 Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from
I need the correct values for each section
1 Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably From several suburban and downtown shopping mall locations. Lon has gathered the following investment information. Five used vans would cost a total of 574,798 to purchase and would have a 3-year useful life with negligible salvage value. Lon plans to use straight-line depreciation Ten drivers would have to be employed at a total payroll expense of $48,000. Other annual out-of-pocket expenses associated with running the commuter service would include Gasoline $16,300, Maintenance $3,600, Repairs $3.700. Insurance $4,300, and Advertising $2,300. Lon has visited several financial institutions to discuss funding. The best interest rate he has been able to negotiate is 15%. Use this rate for cost of capital. Lon expects each van to make ten round trips weekly and carry an average of six students each trip. The services expected to operate 30 weeks each year, and each student will be charged 512 for a round-trip ticket 2 3. 4 un Click here to view PV table Determine the annual (1) riet Income and (2) net annual cash flows for the commuter service. (Round answers to decimal places, eg 125) Net income (a) Determine the annual (1) net income and (2) net annual cash flows for the commuter service. (Round answers to decimal places, es 125) Net income Net annual cash flows $ $ (b) Compute (1) the cash payback period and (2) the annual rate of return (Round answers to 2 decimal places, eg. 10.50) years Cash payback period Annual rate of return 96 Compute the net present value of the commuter service (Round answer to decimal ploces eg. 125. If the net present value is negative, use either a negative sin preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided) Net present value Step by Step Solution
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