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You have the opportunity to purchase a Cajun food truck in Boise City, OK in anticipation of the 75th celebration of the end of the

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You have the opportunity to purchase a Cajun food truck in Boise City, OK in anticipation of the 75th celebration of the end of the dust bowl. Your constant dollar minimum ROR is 12%. You assume that the current inflation rate of 3%/yr will continue through the foreseeable future. You decide to evaluate this opportunity on a 5-year project life. The purchase price of the food truck is $75,000. The estimated salvage value in today's dollar) of the food truck at the end of the project is $7,000. With all the recreation in the Oklahoma panhandle, you don't plan to work too much.so you expect to serve food, on average, 150 days per year with an average daily income daily income of $250 per day worked in today's dollar). You expect that you will be able to increase your prices 5% per year. The cost of food, supplies, and fuel are estimated to be $18,000/yr (escalated dollar) in year 1 and to escalate 7% per year in years 2 and 3, and 4% per year in years 4 and 5. a. Determine whether the project is economically attractive using an escalated dollar NPV analysis. (3 points) b. Repeat part a. using constant dollar NPV analysis. Perform the analysis using the end of year 2 as reference point. (3 points) c. Repeat part a. using an escalated Future Worth Profit analysis. (3 points) d. Repeat part a. using a constant dollar Future Worth Profit analysis. Perform the analysis using the end of year 0 as the reference point. (3 points)

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