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Question 17 of 20 < > View Policies -15 Question List Current Attempt in Progress Blossom Timur is an accounting major at a midwestern

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Question 17 of 20 < > View Policies -15 Question List Current Attempt in Progress Blossom 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. Blossom, 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. Blossom has gathered the following investment information. 1. Five used vans would cost a total of $74,700 to purchase and would have a 3-year useful life with negligible salvage value. Blossom plans to use straight-line depreciation. Question 1 Accounting Dropdown Question 2 Accounting Dropdown 2. Ten drivers would have to be employed at a total payroll expense of $48,500. 3. Other annual out-of-pocket expenses associated with running the commuter service would include Gasoline $15,700, Maintenance $3,300, Repairs $3,900, Insurance $3,900, and Advertising $2,700. 4. Blossom 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. Blossom expects each van to make 10 round trips weekly and carry an average of 6 students each trip. The service is expected to operate 30 weeks each year, and each student will be charged $12 for a round-trip ticket Click here to view PV table. Question 3 Accounting Multistep Question 4 Accounting Multistep Question 5 Accounting Dropdown Question 6 Accounting Dropdown Question 7 Accounting Dropdown (a) Question 8 Accounting Dropdown Determine the annual (1) net income and (2) net annual cash flows for the commuter service. (Round answers to 0 decimal places, e.g. 125.) Question 9 Net Income $ Net annual cash flows $ Accounting Multistep Question 10 Accounting Dropdown (b) Question 11 Accounting Multistep Compute (1) the cash payback period and (2) the annual rate of return. (Round answers to 2 decimal places, e.g. 10.50.) Question 12 Cash payback period Annual rate of return (c) years % Accounting Dropdown Question 13 Accounting Multistep Question 14 Accounting Multistep

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