1. Kay Sadilla is considering investing in a franchise that requires an initial outlay of $75,000. She conducted market research and found that after-tax cash flows on the investment should be about $15,000 per year for the next 7 years. The franchiser stated that Kay would generate a 20 percent return. Her cost of capital is 10 percent. Find the following: a. The PVB b. The PVC c. The NPV d. The IRR 2. Manny Kurr is considering the purchase of a beauty salon. The initial cost of this purchase is $16,000. The after-tax cash flows from this investment should be $4,000 per year for the next 5 years. His opportunity cost of capital is 10 percent. Calculate the following: a. Payback-Should Manny buy the beauty salon based on payback if his required payback is less than 3 years? b. The present value of the benefits (PVB), c. The present value of the costs (PVC), d. The net present value (NPV)-Should Manny buy the beauty salon based on NPV rules? e. Profitability index (PI)-what does the profitability index mean in terms of buying the beauty salon? f. Internal rate of return (IRR), (Hint: Use interpolation)-should Manny buy the beauty salon based on IRR rules? g. Accounting rate of return (ARR)-Should Manny buy the beauty salon based on the ARR?