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10) You have 3 car dealerships and you are looking at opening a fourth dealership. Your initial investment on the project is $4,500,000. Year 1
10) You have 3 car dealerships and you are looking at opening a fourth dealership. Your initial investment on the project is $4,500,000. Year 1 return of $500,000. Year 2 return of $900,000. Years 3 through 6 return of $1,100,000. In year 7 you sell the project for $2,500,000. The auto industry generally requires a return of 15%.
**PLEASE SHOW WORK**
What is the NPV?
Do you do this deal?
What is the IRR?
What minimum sales price for the project in year 7 would you need to get in order to obtain a 15% IRR?
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