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 1. Five used vans would cost a toy of $75,300 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 $47,990 Other annual out of pocket expenses associated with running the commuter service would include Gasoline $15,990, Maintenance $3,310, Repairs $4,000, Insurance $4,200, and Advertising $2,510. 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. 5. Lon expects each van to make ten round trips weekly and carry an average of six students each trip. The service is expected to operate 30 weeks each year, and each student will be charged $12.05 for a round-trip ticket. able Future Value of 1 (n) Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 0 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1 1.04000 1.05000 1.06000 1.07000 1.08000 1.09000 1.10000 1.11000 1.12000 1.15000 1.08160 1.10250 1.12360 1.14490 1.16640 1.18810 1.21000 1.23210 1.25440 1.32250 2 3 1.12486 1.15763 1.19102 1.22504 1.25971 1.29503 1.33100 1.36763 1.40493 1.52088 4 5 1.16986 1.21551 1.26248 1.31080 1.36049 1.41158 1.400 1.51807 1.57352 1.74901 1.21665 1.27628 1.33823 1.40255 1.46933 1.53862 1.61051 1.68506 1.76234 2.01136 1.26532 1.34010 1.41852 1.50073 1.58687 1.67710 1.77156 1.87041 1.97382 2.31306 6 7 1.31593 1.40710 150363 1.60578 1.71382 1.82804 1.94872 2.07616 2.21068 2.66002 1.36857 1.47746 1.59385 1.71819 1.85093 1.99256 2.14359 2.30454 2.47596 3.05902 co 9 10 11 12 13 14 1.42331 1.55133 1.68948 1.83846 1.99900 2.17189 2.35795 2.55803 2.77308 3.51788 1.48024 1.62889 1.79085 1.96715 2.15892 2.36736 2.59374 2.83942 3.10585 4.04556 1.53945 1.71034 1.89830 2.10485 2.33164 2.58043 2.85312 3.15176 3.47855 4.65239 1.60103 1.79586 2.01220 2.25219 2.51817 2.81267 3.13843 3.49845 3.89598 5.35025 1.66507 1.88565 2.13293 2.40985 2.71962 3.06581 3.45227 3.88328 4.36349 6.15279 1.73168 1.97993 2.26090 2.57853 2.93719 3.34173 3.79750 4.31044 4.88711 7.07571 1.80094 2.07893 2.39656 2.75903 3.17217 3.64248 4.17725 4.78459 5.47357 8.13706 1.87298 2.18287 2.54035 2.95216 3.42594 3.97031 4.39497 5.31089 6.13039 9.35762 1.94790 2.29202 2.69271 3.15882 3.70002 4.32763 5.05447 5.89509 6.86604 10.76126 2.02582 2.40662 2.85434 3.37993 3.99602 4.71712 5.55992 6.54355 7.68997 12.37545 2.10685 2.52695 3.02560 3.61653 4.31570 5.14166 6.11591 7.26334 8.61276 14.23177 2.19112 2.65330 3.20714 3.86965 4.66096 5.60441 6.72750 8.06231 9.64629 16.36654 15 16 17 18 19 20 Table 2 Future Value of an Annuity of 1 (n) Payments 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 2 3 4 5 6 7 ca 9 10 1.00000 1.00000 1.00000 1.0000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2.04000 2.05000 2.06000 2.0700 2.08000 2.09000 2.10000 2.11000 2.12000 2.15000 3.12160 3.15250 3.18360 3.21493.24640 3.27810 3.31000 3.34210 3.37440 3.47250 4.24646 4.31013 4.37462 4.4399 4.50611 4.57313 4.64100 4.70973 4.77933 4.99338 5.41632 5.52563 5.637095.7507 5.86660 5.98471 6.10510 6.22780 6.35285 6.74238 6.63298 6.80191 6.97532 7.1533 7.33592 7.52334 7.71561 791286 8.11519 8.75374 7.89829 8.14201 8.39384 8.6540 8.922809.20044 9.48717 9.78327 10.08901 11.06680 9.21423 9.54911 9.89747 10.2598 10.63663 11.02847 11.43589 11.85943 12.29969 13.72682 10.58280 11.02656 11.49132 11.9780 12.48756 13.02104 13.57948 14.16397 14.77566 16.78584 12.00611 12.57789 13.18079 13.8164 14.48656 15.19293 15.93743 16.72201 17.54874 20.30372 13.48635 14.20679 14.97164 15.7836 16.64549 17.56029 18.53117 19.56143 20.65458 24.34928 15.02581 15.91713 16.86994 17.8885 18.97713 20.14072 21.38428 22.71319 24.13313 29.00167 16.62684 17.71298 18.88214 20.1406 21.49530 22.93339 24.52271 26.21164 28.02911 34.35192 18.29191 19.59863 21.01507 22.5505 24.21492 26.01919 27 97498 30.09492 32 3926040.50471 20.02359 21.57856 23.27597 25.1290 27.15211 29.36092 31.77248 34.40536 37.27972 47.58041 21.82453 23.65749 25.67253 27.8881 30.32428 33 00340 3394973 39.18995 42.75328 35.71747 23.69751 25.84037 28 21288 30.8402 33.75023 36.97331 40.54470 44.50084 48.88367 65.07509 25.64541 28.13238 30.90565 33.9990 37-45024 41.30134 45.59917 50.39593 33.74972 75.83636 2767123 30.53900 33.75999 31.3790 41.44626 46.01846 31.15909 36.93949 63.43968 SS 21181 29.77808 33.06595 36.78559 40,9933 43.76196 51 16012 37.27500 64.20283 72.05244 102 44358 11 12 13 14 15 16 17 18 19 20 Table 3 Present Value of 1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 96154 95238 94340 93458 92593 917439090990090 89286 86957 2 .92456 9070389000 87344 .85734 84168 82645 81162.79719_75614 -88900 8638483962 81630 79383 77218 75132 7311971178 65752 3 4 5 6 8 9 8548082270.79209 76290.73503.70843.68301.6587363552 57175 .82193 78353 .74726 71299 .68058 .64993 .62092 5934556743 49718 79031 74622 70496 66634 .6301759627 5644753464 50663 43233 -75992 71068 .66506 .62275 5834954703 51316 48166 45235 37594 .73069 67684 62741 58201 54027 5018746651 .4339340388 32690 .70259.64461 59190 543935002546043 42410 3909236061__28426 .67556 .61391 55839 50835 46319 4224138554 35218 32197 24719 64958 584685267947509 42888 38753 350493172828748 21494 .62460 55684 49697 4440139711 33554 31863 28584 25668 18691 .60057.53032 4688441496 3677032618 28966 25751 22917 16253 5774850507 44230 38782 340462992526333 23199 20462 14133 10 11 12 13 14 15 .55526 4810241727 36245 31524 27454 23939 20900 1827012289 16 17 18 53391 45811 39365338732918925187 21763 1882916312 10687 51337 43630 37136 31657 27027 23107 19785 16963 14564 09293 49363 4155235034 29586 25025 21199 1798615282 13004 08081 47464 3957333051 27615 23171 19449 16351 13768 11611 07027 45639 37689 31180 2584221455117843 14864 12403 10367.06110 19 20 Table 4 Present Value of an Annuity of 1 (n) Payments 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 96154 95238 94340 93458 92593 91743 90909 90090 .89286 .86957 2 1.88609 1.85941 1.83339 1.80802 1.78326 1.75911 1.73554 1.71252 1.69005 1.62571 3 2.77509 2.72325 2.67301 2.62432 2.57710 2.53130 2.48685 2.44371 2.40183 2.28323 4 3.62990 3.54595 3.46511 3.38721 3.31213 3.23972 3.16986 3.10245 3.03735 2.85498 4.21236 4.10020 3.99271 3.88965 3.790 79 3.69590 3.60478 3.35216 5 4.45182 4.32948 6 5.24214 5.07569 4.91732 4.76654 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448 7 6.00205 5.78637 5.58238 5.38929 5.20637 5.03295 4.86842 4.71220 4.56376 4.16042 8 6.73274 6.46321 6.20979 5.97130 5.74664 5.53482 5.33493 5.14612 4.96764 4.48732 9 10 7.43533 7.10782 6.80169 6.51523 6.24689 5.99525 5.75902 5.53705 5.32825 4.77158 8.11090 7.72173 7.36009 7.02358 6.71008 6.41766 6.14457 5.88923 5.65022 3.01877 8.76048 8.30641 7.88687 7.49867 7.13896 6.80519 6.49506 6.20652 5.93770 5.23371 11 12 9.38507 8.86325 8.38384 7.94269 7.53608 7.16073 6.81369 6.49236 6.19437 5.42062 13 9.98565 9.39357 8.85268 8.35765 7.90378 7.48690 7.10336 6.74987 6.42355 5.58315 14 13 .16 17 10.56312 9.89864 9.294988.74547 8.24424 7.78615 7.36669 6.98187 6.62817 5.72448 11.11839 10.37966 9.71225 9.10791 8.55948 S.06069 7.60608 7.19087 6.81086 5.84737 11.65230 10.83777 10.10590 9.44665 8.85137 8.312567.82371_7.37916 697399 5.95424 12.16567 11.27407 10.47726 9.76322 9.12164 8.54363 3.02155 7.54879 7.11963 6.04716 12.65930 11.68959 10.82760. 10.05909 9.37189 8.75563 8.20141 7.70162 7.24967 6.12797 13.13394 12.08532 11.15812 10.33560 9.60360 8.95012 5.36492 7.83929 736578 6.19823 13.59033 12.46221 11.46992 10.59401 9.81815 9.12855 8.51336 7.96333 7.46944 6.25933 18 19 20 CALATO GE Click here to view i table (a) Determine the annual (1) net income and (2) net annual cash flows for the Commuter Services (Romer to decimal places. 125.) Net income Net annual cash flows $ (1) Compute (1) the cash payback period and (2) the annual rate of return. (Hound answers to decimal places. 10.50) Cash payback period years Annual rate of return (c) Compute the net present value of the commuter service. (Hound answer to decimal : 125. If the nel present value is negative theragatives preceding the number +5 or parenthe e... (45), For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value Click if you would like to show Work for this questioni De Sheet Work
