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4. Mahsa is considering quitting her job to start a bakery, her dream work. To do so, she would need to make an investment of

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4. Mahsa is considering quitting her job to start a bakery, her dream work. To do so, she would need to make an investment of OMR 80,000 today. She estimates that the bakery would generate revenues of OMR 90,000 over the next five years and would require OMR 20,000 in expenses. At his current job she earns OMR 50,000. Therefore, Mahsa estimates that the incremental cash flows from opening the bakery would be OMR 20,000 per year for the next five years. Calculate the NPV of the business using a discount rate of 15%. Should Mahsa quit her job and start the bakery? Answer: If Mahsa instead invests an additional OMR 5,000 in new equipment and upgrades for the bakery each year, the bakery will remain operational and generate net cash flows of OMR 15,000 into perpetuity. Given the same initial investment of OMR 80,000 and discount rate of 15%, calculate the NPV of opening the bakery. Should Mahsa quit her job and start the bakery

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