Problem 12-2A a-c (Video) Lon Timur is an accounting majorat 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 e belleves that a weekend commuting service could be organized and run prortably from several suburban and downtown shopping mall locations. Lon has gathered the following investment information 1. Five used vans would cost a total of $72,932 to purchase and would have a 5-year useful life with negiqible salvage valu. Lon plans to use straight-ine depreciation 2 Ten drivers would have to be employed at a total payroll expense of $47,200. 3. Other annual out-of-pocket expenses sociated with running the commuter service would include Gasoline $16,000, Mantenance 53,700, Repairs $4,000, Insurance $4,300, and Advertising $2,500. 4. Lon has visited several financial institutions to discuss funding. The best interest rate he has been able to negotiate w 15 this rate for cost of capital, 5. Lon expects each van to make ten round trips weekly and carry an average of sex students each trip. The service is expected to operate 30 weeks each year, and each student will be charged 512 for a round-trip ticket Click here to view table (a) Determine the annual (1) net income and (2) net annual cash flows for the commuter service. (Round answer to decimal places.. 125.) vet income Net annual cash flows (6) Compute (1) the cash payback period and (2) the annual rate of retum. (Round answers to 2 decimal places. 10.50 Cash payback period years Annual rate or return Version 4 24 Determine the annual (1) net income and (2) net annual cash flows for the commuter service. (Round answers to decimal place ... 125.) Net income Net annual cash flows (b) Compute (1) the cash payback period and (2) the annual rate of retum. (Hound answers to decimal places. 10.50 Cash payback period years Annual rate of return Compute the net present value of the commuter services (Round answer to a decimal: 125. Ir the nearest value is negative either a negative sin receding the number eg 45 or parentheses (45). For calculation purposes se decimal laces as played in the factor table provided) Net present value Click if you would like to show Work for this questiont Doen Show Work LINKTET LINE TO TEXT LETO TEXT VIDEO SIMILAR POR