Question
1. A small commercial property is for sale near your university. Given its location, you believe a student-oriented business would be very successful there. You
1.A small commercial property is for sale near your university. Given its location, you believe a student-oriented business would be very successful there. You have researched several possibilities and come up with the following cash flow estimates (including the cost of purchasing the property) as well as their cost of capital estimates. With the knowledge of investment evaluation learned in the corporate finance class, you are trying to compute the NPV and IRR of these projects as shown in the last two lines of the table but with two of them unfinished.
Partner A argues that the electronic shop is clearly better than the coffee shop since they require the same initial investment but the former delivers higher cash flows every year. Do you agree?
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