Assume the management of the Daily Grind wants to install an espresso bar in its restaurant. The cost of the espresso bar is $140,000 and it has a 10-year life. The bar will generate annual net cash inflows of $35,000. Management requires a payback period of five years or less. What is the payback period on the espresso bar? Assuming the hurdle rate is 10 % and the company will receive one time cash recovery of the cost, $140,000, at the end of the 10 year of an alternative project, which of the two projests would you consider. Use any method of analysis. Company Y expects annual net cash flow of $3,000 from an investment of $16,950. What is the rate of return that would make the net present value of this project to be zero. 4. Cash flow $1,000 2,000 2,500 4,000 5,000 6,000 5,000 4,000 $3,000 2,000 An investment was made at the beginning of the year, when the project started and an additional investment was made at the end of the beginning of the second year of the project. Assuming the annual cash flow from the investments are presented in the table above. Investment $15,000 Year 1 2 8,000 3 4 5 6 7 9 10 Determine the payback period of the project. Assuming the company earns 10% interest on any cash invested anywhere, use additional analysis to discuss the viability of the project