Question: UPVOTE GUARANTEED!!! PLEASE HELP!!! Luis is considering purchasing and operating a food truck. He estimates the cost of a fully renovated and equipped food truck

UPVOTE GUARANTEED!!! PLEASE HELP!!!

UPVOTE GUARANTEED!!! PLEASE HELP!!! Luis is considering purchasing and operating a food truck. He estimates the cost of a fully renovated and equipped food

Luis is considering purchasing and operating a food truck. He estimates the cost of a fully renovated and equipped food truck to be $100,000 which would be paid in full at the beginning of the project. He estimates cash flows of $30,000, $50,000, and $70,000 at the end of years 1, 2 and 3 respectively. At the end of year 4 the truck will need to be updated making the expected cashflow at the end of year 4 negative $80,000. Luis plans to operate the truck for one more year and then sell it making the total cash flow at the end of year 5 $73,000. Assume the cost of capital is 20%. Find the IRR of the food truck project and make a recommendation to Luis based on your IRR analysis

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