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Adorn Hair Design Studios would like to purchase another hair salon that is being sold in a neighboring town for $450,000. Assume cash flows occur
Adorn Hair Design Studios would like to purchase another hair salon that is being sold in a neighboring town for $450,000. Assume cash flows occur at the end of the year. Based on past volume of sales, Adorn estimates the net cash flows that would be generated by the salon: EE Click the icon to view the net cash flows.) After six years, Adorn can sell the salon for $310,000. Requirement If the interest rate on this investment is 11%, compounded annually, should Adorn purchase the salon? First, calculate the present value of the cash inflows from the new salon. (Use the present value and future value tables, tl using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXx The present value of the cash inflows from the new salon amounts to $ Data Table Years 1-3 4 Cash Flows 63,000 69,000 82,000 63,000 6
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