Bruce is considering the purchase of a restaurant named Hard Rock Hollywood. With the help of his accountant, Bruce projects the net cash flows $($cash inflows less cash outflows$)$ from the restaurant to be the following amounts over the next $10$ years:

Years Amount

$1$ to $6$ $$99,000($each year$)$

$7109,000$

$8119,000$

$9129,000$

$10139,000$

Bruce expects to sell the restaurant after $10$ years for an estimated $$1,290,000.($FV of $$1,$ PV of $$1,$ FVA of $$1,$ and PVA of $$1)($Use tables, Excel, or a financial calculator. Round your answer to $2$ decimal places.$)$

Required:

$1-$a$.$ Calculate the total present value of the net cash flows if Bruce wants to make at least $12\%$ annually on his investment. $($Assume all cash flows occur at the end of each year. Be sure to include the selling price in your calculation.$)$

$1-$b$.$ Assuming the restaurant is listed for sale at $$1,050,000,$ should he purchase the restaurant?