Question: Year 1 Year 2 Year 3 Year 4 Year 5 Revenues $330,000 $330,000 $350,000 $380,000 $400,000 Driver costs $33,000 $35,000 $36,000 $38,000 $40,000 Repairs 5:

Year 1 Year 2 Year 3 Year 4 Year 5 Revenues
Year 1 Year 2 Year 3 Year 4 Year 5 Revenues $330,000 $330,000 $350,000 $380,000 $400,000 Driver costs $33,000 $35,000 $36,000 $38,000 $40,000 Repairs 5: maintenance $8,000 $13,000 $15,000 $18,000 $18,000 Other costs $130,000 $135,000 $140,000 $138,000 $142,000 Annual depreciation $120,000 $120,000 $120,000 $120,000 $120,000 The buses would be purchased at the beginning of the project {i.e., in Year 0) and all revenues and expenditures shown in the tabie above would be incurred at the end of each relevant yea r. Because schools are exempt from taxes, the school's corporate tax rate is 0 percent. A business consultant has advised management that they should use a weighted average cost of capital {WACCJ of 10.5 percent to evaluate this project. - Prepare a table showing the estimated net cash ows for each year of the project. Explain all steps involved in your calculation of the Year 1 estimated net cash flow

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