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FIN 3113 Food Truck Project Cash Flow Mini CaseRecently, Austin Hansen was laid off from his job of 25 years.He and his wife, Anne, decidedto purchase and operate a food truck, serving burgers, fries,and soft drinks near OSU campus.They decided the call their food truck, Hungry HansenHamburgers!The Hansens were able to find a truck that costs $60,000.However, the truck will require anadditional $20,000 for the wrap and equipment. The truck has anexpected life of six years andwill be depreciated using a five-year MACRS life. The expectedsalvage value for the truck atthe end of its useful life is $20,000. Additionally, the Hansenswill need to make an initialinvestment of $2,000 for product inventory (e.g., meat,hamburger buns, etc.), which will berecovered at the end of the life of the project.During the first year of operation, revenues are expected to be$60,000, increasing to $120,000per year for years 2-6. Permits and licenses are expected to be$500 per year. Fuel and powerare expected to be $300 per month and the cost of materials isexpected to be 40% of revenue.The tax rate is 25% and the cost of capital (discount rate) is15%.Calculate the project’s annual free cash flows over the expectedlife of the equipment.