Infove years, Kent Duncan will retire. He is exploring the possibility of opening a self service car wath The car wash could be managed in the tree time he has available from his regular occupation, and it could be closed easily when he retiren Atter careful study, Mr Duncan bas determined the following: A buiding in which a car wash could be installed is available under a five-year lease at a cost of $3.500 per month Purchase and installation costs of equipment would total $153,000. In five years the equipment could be sold for about 10% of its orginal cost An investment of an additional $5,000 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 . Both a wash and a vacuum service would be offered with a wash costing $1.51 and the vacuum costing 5075 per use 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 clearing $1600, insurance, 575, and maintenance $1735 Gross receipts from the wash would be about $1,812 per week. According to the experience of other car washes, 60% of the customers using the wash would also use the vacuum Mt Duncan will not open the car wash unless it provides at least a 7% return Required: 1 Assuming that the car wash will be open 52 weeks a year, compute the expected annual net cash receipts from its operation 5 94224 35.100 129.324 5 Auto wash cash receipts Vacuum cash receipts Totalcash recipe Les cash distants Water Electric Rent Cleaning Ine Menance Total cash disbursements All cash flow from operations 4.680 4.580 9.30 115,954 5 2. Determine the net present value using the net present value method of investment analysis (Any cash outflows should be Indicated by a minus sign. Round the final answers to the nearest whole dollar) Peter Cash Flow Cash Cost of the Working capital Natal cash Working capital Salvage value Nepreben Year! Now Now 1-5 5 5 2.b. Would you advise Mr Duncan to open the car wash? ores NO