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Daniela, a junior in high school, is considering a delivery program for a local grocery store to earn extra money for college. Her idea is to buy a used car and deliver groceries after school and on weekends. She estimates the following revenues and expenses.
• Start-up costs of $1,000 for the car and minor repairs.
• Weekly revenue of about $150.
• Ongoing maintenance and gasoline costs of about $45 per week.
• After nine months, replacement of the brake pads on the car for about $350.
• Sale of the car at year-end for about $450
What is the difference between the PV of the venture (assuming a rate of 6 percent compounded annually) and its start-up costs?