You notice that all your neighbors seem to need various items (e.g., tree limbs, construction debris) hauled away. You are thinking of buying a dump truck for $70,000. You estimate you could generate annually $25,000 a year cash flow (end of year). However, in the first year you expect cash flow to equal $0. That is, the first $25,000 of cash flow will start at the end of the second year. The estimated life of the truck is 8 years with no salvage value. You would like an annual return of 12%. Should you buy the dump truck?

I'm not sure about my answer (Please use excel).

116 117 118 119 120 121 8. You notice that all your neighbors seem to need various items (e.g., tree limbs, construction debris) hauled away. You are thinking of buying a dump truck for $70,000. You estimate you could generate annually $25,000 a year cash flow 122 cash flow to equal $0. That is, the first $25,000 of cash flow will start at the end of the second year. The estimated life of the truck is 8 years with no salvage value. You would like an annual return of 12%. Should you buy the dump truck? 123 124 PV -70,000 125 FV $97,477.59 126 N 1271 0.12 128 PMT $25,000.00 129 130 Answer: yes Cheat Sheet 330