In elght years, Kent Duncan will retire. He has $360,000 to Invest, and he is exploring the possibility of opening a self-service car wash. The car wash could be managed in the free time he has avallable from his regular occupation, and it could be closed easlly when he retlres. After careful study, Kent has determined the following: a. A bullding, in which a car wash could be Installed, is avallable under an eight-year lease at a cost of $3,400 per month. b. Purchase and Installation costs of equipment would total $360,000. In elght years, the equipment could be sold for about 10% of its original cost. c. An Investment of an additional $9,000 would be required to cover working capltal needs for cleaning supplies, change funds, and so forth. After elght years, this working capital would be released for Investment elsewhere. d. Both a car wash and a vacuum service would be offered, with a wash costing $3 and the vacuum costing 50 cents per use. e. The only varlable costs assoclated with the operation would be 42 cents per wash for water and 80 cents per use of the vacuum for electricity. f. In addition to rent, monthly costs of operation would be as follows: cleaning, $820; Insurance, $210; malntenance, $1,180. g. Gross recelpts from the car wash would be about $3,900 per week. According to the experlence of other car washes, 70% of the customers using the wash would also use the vacuum. h. Kent will not open the car wash unless It provides at least a 10% return, since this is the amount that could be earned by simply placing the $360,000 in high-grade securlties. Click here to view Exhiblt 10-1 and Exhiblt 10-2, to determine the approprlate discount factor(s) using tables. Required: 1. Assuming that the car wash will be open 52 weeks a year, compute the expected net annual cash recelpts (gross cash recelpts less cash disbursements) from Its operation. (Do not Include the cost of the equipment, the working capltal, or the salvage value in these computations.) 2-a. Compute the NPV using the method of Investment analysis. (Round dlscount factor(s) to 3 decimal places. Round other Intermedlate calculations and final answer to the nearest whole dollar amount.) 2-b. Would you advise Kent to open the car wash? Yes No