QUESTION $1$

Blaze Scooters is considering expanding into a new college town and has the following operating data:

Initial Investment in scooters $($year $0)$: $$104167$

Cost of securing permits $($assume that permit cost is a tax$-$deductible expense in year $1)$: $$8932$

Anticipated Revenue: $$193346$ for years $1-5.$

Depreciation of scooters $-$ straight line down to $0$ over $5$ years.

Operating expenses $($not including Depreciation$)$: $$77410$ per year.

Tax Rate: $18\%.$

Net Working Capital, consisting of cash, spare parts inventory, accounts receivable, and accounts payable: $$30,000.$ Blaze expects to be able to recoup $100\%$ of Net Working if they shut down. Assume that investment in working capital occurs in year $0$ at the start of the project.

Scrap value of scooters at the end of $5$ years: $$20,000.($remember that any capital gains when selling are taxable$)$

Assume that Blaze makes the necessary investments, operates for $5$ years, and then shuts down, selling the scooters for scrap and recouping Net Working Capital. What are their expected after$-$tax cash flows for year $2$ rounded to the nearest cent $(\mathrm{.}01)?$

QUESTION $2$

Blaze Scooters is considering expanding into a new college town and has the following operating data:

Initial Investment in scooters $($year $0)$: $$101992$

Cost of securing permits $($assume that permit cost is a tax$-$deductible expense in year $1)$: $$12135$

Anticipated Revenue: $$193472$ for years $1-5.$

Depreciation of scooters $-$ straight line down to $0$ over $5$ years.

Operating expenses $($not including Depreciation$)$: $$84098$ per year.

Tax Rate: $22\%.$

Net Working Capital, consisting of cash, spare parts inventory, accounts receivable, and accounts payable: $$25775.$ Blaze expects to be able to recoup $100\%$ of Net Working if they shut down. Assume that investment in working capital occurs in year $0$ at the start of the project.

Scrap value of scooters at the end of $5$ years: $$20140.($remember that any capital gains when selling are taxable$)$

Assume that Blaze makes the necessary investments, operates for $5$ years, and then shuts down, selling the scooters for scrap and recouping Net Working Capital. What are their expected after$-$tax cash flows for year $5$ rounded to the nearest cent $(\mathrm{.}01)?$