Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please write out work and formulas (not just excel sheets) 2. Arda's Food Truck (20 points) After seeing so many food trailers in Austin, Arda
Please write out work and formulas (not just excel sheets)
2. Arda's Food Truck (20 points) After seeing so many food trailers in Austin, Arda is considering in investing in a food trailer He finds out that he can purchase a used trailer for $15,000 and use it for 5 years. At the end of the 5-year period, he is confident that he can sell the trailer for $5000 (in real terms) An initial analysis shows that he has to take into account operating, managerial, and material costs. He estimates that operating costs will be $2000/year, managerial costs are $3000/year and material costs are $5000/year. Operating, managerial and material costs are given in real terms The real MARR is 10%/year a. What is the capital ownership cost (or the capital recovery cost) for the trailer (in real terms)? (5 points) What is the annual equivalent worth of this investment (in real terms)? (5 points) Now suppose the food truck will be serving burritos for $5 each (in real terms). What is b. c. the minimum number of burrito's Arda has to sell each vear to justify this investment? (5 points) ow, suppose that for the five-year investment period his revenue (in real terms) is given in the following table Year Revenue per ear 0 2 3 4 $%13000 $15000 $17000 $22000 $24000 What is this investment's undiscounted payback-period? (5 points)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started