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please help with questions 17-22! thank you Capital Budgeting Computations Part Two (20 points) MOST You want to examine building out a new business: Holy

please help with questions 17-22! thank you image text in transcribed
Capital Budgeting Computations Part Two (20 points) MOST You want to examine building out a new business: Holy Water Car Wash. DIFFICULT You first need to buy and improve the land. The land will cost $100,000, but it needs sewer and electric set up ($50,000) plus needs to be leveled and covered in asphalt ($25,000). Then, you need to install the washing equipment, which isn't cheap: it will cost $200,000. It will process a maximum of 12,000 cars per year. You will depreciate this new equipment straight-line over 10 years to zero. You forecast that the number of washes sold in Year 1 would be 7,500, and that number would increase 20% per year (until it reaches maximum machine capacity). You will sell washes at $10 each, every year. HOLY WATER Variable Expenses of the business are the per-wash costs of soap ($1 per wash), electricity ($1 per CAR WASH wash), and water ($1 per wash). Plus de la fine der er for Ca' Fixed Expenses of the business are the two wash attendants who each make $20,000 per year in salary & benefits. Plus, insurance ($5,000) and basic utilities ($5,000). You want to model out for 5 years. Your tax rate is 35%. You have other businesses, so if you have a loss in any year, you will have the benefit of any tax credits. In Year 5, you will sell the car wash and the sale price will be 5 times Year 5 Net Sales Revenue. Item Year o Year 1 Year 2 Year 3 Year 4 Year 5 EBIT Free Cash Flow Question # 17 18 19 20 21 22

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