Franklin is planning for a purchase of a vehicle in two years. Since he wants to be certain that his funds are safe (insured), which of the following should he use? *
O A credit card
O A mortage
O A loan
O A savings account

First year:            19,000

Second year:       17,000

Third year:           15,000

Forth year:           13,000

Fifth year:            30,000

Explanation:

We need to subtract from the expected revenue the expected cost for Cash revenue                65,000

Driver Cost:         (40,000)

Operating cost:    (6,000)  

Net cash flow:       19,000

This value stand for the first year

Then this will decrease by 2,000 each year as the driver wages increase over time.

Second year: 19,000 - 2,000 = 17,000

Third year: 17,000 - 2,000 = 15,000

Forth year: 15,000 - 2,000 = 13,000

In the last year we must also include the residual value of the equipment:

Fifth year: 13,000 - 2.000 + 15,000 = 30,000