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1 50 (50 points) You are always looking for a good investment opportunity and are planning to jump on one of the recent exercise crazes.
1 50 (50 points) You are always looking for a good investment opportunity and are planning to jump on one of the recent exercise crazes. You have identified two franchise opportunities worth pursuing, Underwater MMA (UMMA) or Off-Road Uncycling (ORU). You already have a building, but some renovations would be needed. Given the data listed below, determine which opportunity will provide the best financial situation 5 yrs from now, assuming an effective annual interest rate of 6%?) Up-front costs (renovation and license) Annual Franchise Fee (payable at end of year) Anticipated Annual Net Income (credited at the end of the year) UMMA $180,000 $ 12,000 Year 1 $ 85,000 Year 2-5 $ 220,000 ORU $120,000 $ 15,000 $ 70,000 $ 210,000
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