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5 1 . You are planning to buy a petrol station, which costs $ 5 0 0 , 0 0 0 . The station will

51. You are planning to buy a petrol station, which costs $500,000. The station will be in operation for 10 years. If purchased, the business is expected to generate a first cash flow of $90,000 this year which is expected to grow at 6.5% p.a. If the similar business offers 14.5% p.a. rate of return, use IRR and NPV approach to identify if it is worth buying.

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