John White is considering purchasing a mobile ice cream truck for $50,000. He plans to hire three students to operate the truck eight hours a day, five days a week., for forty-eight weeks of the year at Sunshine University. He believes the truck will have a five-year useful life and should be depreciated on a straight-line basis to zero, even though he believes he can sell it for $2,000 at the end of five years. He believes the annual revenues and cash expenses for five years will be as follows: Ice cream sales $150,000 Cost of ice cream 20% Labor costs 40% Supplies 5% Maintenance 5,000 Other expenses 10% Assume his average tax rate is 20%.

Required:

1. Calculate his annual net income 

2. Calculate his annual cash flows. 

3. Determine the payback period, NPV, and IRR, assuming a cost of capital of 8%.