Business Evaluation After you have completed your cash flow estimation, now you can evaluate whether your business is profitable and answer a more important question should I go on with it? Among those, you have to use Net Present Value (NPV) as criteria for the evaluation, while the others are optional. Please keep in mind that whether business is profitable does not impact the grading of this project in any way. What matters is whether you properly evaluate it. Please write answer as paragraphs

\begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline & Year 0 & Year 1 & Year 2 & Year 3 & Year 4 & Year 5 & Year 6 & Year 7 & Year 8 \\ \hline FCF & 2,021,310.58 & 568,450.93 & 547,964.34 & 482,678.61 & 497,589.16 & 606,769.43 & 479,235.39 & 663,671.28 & 1,986,272.42 \\ \hline WACC & 10.52% & & & & & & & & \\ \hline & & & & & & & & & \\ \hline PI & 1.73 & & & & & & & & \\ \hline IRR & 25% & & & & & & & & \\ \hline MIRR & 18% & & & & & & & & \\ \hline \multicolumn{10}{|l|}{ Pay back } \\ \hline Year & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 \\ \hline FCF & 2,021,310.58 & 568,450.93 & 547,964.34 & 482,678.61 & 497,589.16 & 606,769.43 & 479,235.39 & 663,671.28 & 1,986,272.42 \\ \hline Leftover cost & 2,021,310.58 & 1,452,859.64 & - 904,895.30 & 422,216.69 & 75,372.47 & 682,141.90 & 1,161,377.29 & 1,825,048.57 & 3,811,320.99 \\ \hline PB & 3.85 & 5 years & & & & & & & \\ \hline & & & & & & & & & \\ \hline & & & & & & & & & \\ \hline \multicolumn{10}{|l|}{ Discount payback } \\ \hline FCF & 2,021,310.58 & 568,450.93 & 547,964.34 & 482,678.61 & 497,589.16 & 606,769.43 & 479,235.39 & 663,671.28 & 1,986,272.42 \\ \hline PV of CF & 2,021,310.58 & 514,343.29 & 448,613.66 & 357,551.29 & 333,511.87 & 367,979.97 & 262,971.97 & 329,513.87 & 892,317.86 \\ \hline Leftover cost & 2,021,310.58 & 1,506,967.28 & 1,058,353.62 & 700,802.34 & 367,290.47 & 689.50 & 263,661.47 & 593,175.34 & 1,485,493.20 \\ \hline DPB & 5.00 & years & & & & & & & \\ \hline & & & & & & & & & \\ \hline \multicolumn{10}{|l|}{ AAR } \\ \hline Year & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 \\ \hline Net income & & 413,005.44 & 400,668.89 & 407,390.60 & 413,527.56 & 439,104.27 & 465,968.46 & 492,326.86 & 541,176.86 \\ \hline Book value & 1408059 & 1,258,746.02 & 1,109,433.05 & 960,120.07 & 810,807.09 & 661,494.12 & 512,181.14 & 362,868.16 & 213,555.18 \\ \hline Depreciation & & 149,312.98 & 149,312.98 & 149,312.98 & 149,312.98 & 149,312.98 & 149,312.98 & 149,312.98 & 149,312.98 \\ \hline Average Net income & 446,646.12 & & & & & & & & \\ \hline Average Book value & 810807.0924 & & & & & & & & \\ \hline AAR & 55% & & & & & & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline Year & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 \\ \hline FCF & - 2,021,310.58 & 568,450.93 & 547,964.34 & 482,678.61 & 497,589.16 & 606,769.43 & 479,235.39 & 663,671.28 & 1,986,272.42 \\ \hline WACC & 10.52% & & & & & & & & \\ \hline NPV & $1,485,493.20 & & & & & & & & \\ \hline & & & & & & & & & \\ \hline Change in WACC & 30% & 20% & 10% & 0% & 10% & 20% & 30% & & \\ \hline WACC & 13.676% & 12.62% & 11.572% & 10.520% & 9.468% & 8.416% & 7.364% & & \\ \hline NPV & $1,054,068 & $1,188,433 & $1,331,979 & $1,485,493 & $1,649,838 & $1,825,965 & $2,014,922 & & \\ \hline \% Change in NPV & 29.043% & 19.997% & 10.334% & 0.000% & 11.063% & 22.920% & 35.640% & & \\ \hline & & & & & & & & & \\ \hline & & & & & & & & & \\ \hline Change in electricity cost per month & 30% & 20% & 10% & 0% & 10% & 20% & 30% & & \\ \hline Electricity per month & 10,205.00 & 9,420.00 & 8,635.00 & 7,850.00 & 7,065.00 & 6,280.00 & 5,495.00 & & \\ \hline NPV & $1,359,282 & $1,401,353 & $1,443,423 & $1,485,493.20 & $1,527,564 & $1,569,634 & $1,611,704 & & \\ \hline Change in NPV & $126,211 & $84,141 & $42,070 & BO & $42,070 & $84,141 & \$126,211 & & \\ \hline & & & & & & & & & \\ \hline Change in hair dresser salary & 30% & 20% & 10% & 0% & 10% & 20% & 30% & & \\ \hline Hair dresser salary & 26000.00 & 24000.00 & 22000.00 & 20000.00 & 18000.00 & 16000.00 & 14000.00 & & \\ \hline NPV & $476,879 & $813,084 & $1,149,289 & $1,485,493.20 & $1,821,698 & $2,157,902 & $2,494,107 & & \\ \hline Change in NPV & $1,008,614 & $672,409 & $336,205 & \$O & $336,205 & $672,409 & $1,008,614 & & \\ \hline% Change in NPV & 67.898% & 45.265% & 22.633% & 0.000% & 22.633% & 45.265% & 67.898% & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline Change in Visit rate for haircut & 30% & 20% & 10% & 0% & 10% & 20% & 30% \\ \hline Visit rate for haircut & 78.0% & 72.0% & 66.0% & 60.0% & 54.0% & 48.0% & 42.0% \\ \hline NPV & $2,212,272 & $1,970,525 & $1,728,452 & $1,485,493.20 & $1,244,321 & $1,001,947 & $759,983 \\ \hline Change in NPV & $726,779 & $485,032 & $242,959 & $0 & $241,172 & $483,546 & $725,511 \\ \hline \% Change in NPV & 48.925% & 32.651% & 16.355% & 0.000% & 16.235% & 32.551% & 48.840% \\ \hline & & & & & & & \\ \hline Change in Visit rate in other services & 30% & 20% & 10% & 0% & 10% & 20% & 30% \\ \hline Visit rate for other services & 65.0% & 60.0% & 55.0% & 50.0% & 45.0% & 40.0% & 35.0% \\ \hline NPV & $3,631,523 & $2,919,130 & $2,192,604 & $1,485,493.20 & $776,373 & $55,427 & $655,625 \\ \hline Change in NPV & $2,146,030 & $1,433,637 & $707,111 & \$0 & $709,120 & $1,430,066 & $2,141,118 \\ \hline \% Change in NPV & 144.466% & 96.509% & 47.601% & 0.000% & 47.736% & 96.269% & 144.135% \\ \hline & & & & & & & \\ \hline Change in \% & 30% & 20% & 10% & 0% & 10% & 20% & 30% \\ \hline Electricity per month & $1,359,282 & $1,401,353 & $1,443,423 & $1,485,493 & $1,527,564 & $1,569,634 & $1,611,704 \\ \hline Hair dresser salary & $476,879 & \$813,084 & $1,149,289 & $1,485,493 & $1,821,698 & $2,157,902 & $2,494,107 \\ \hline Visit rate for haircut & $2,212,272 & $1,970,525 & $1,728,452 & $1,485,493 & $1,244,321 & $1,001,947 & $759,983 \\ \hline Visit rate for other services & $3,631,523 & $2,919,130 & $2,192,604 & $1,485,493 & $776,373 & $55,427 & $655,625 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline Probability & 0.25 & 0.5 & 0.25 & \\ \hline Case & Worst case & Most likely case & Best case & \\ \hline Electricity per month & 9420 & 7850 & 6280 & \\ \hline Hair dresser salary & 24000 & 20000 & 16000 & \\ \hline Visit rate for haircut & 48.00% & 60% & 72.00% & \\ \hline Visit rate for other services & 40.00% & 50% & 60.00% & \\ \hline NPV & -1184669.2 & 1485493 & 4160713 & \\ \hline E(NPV) & 1,486,757.43 & Expected NPV & & \\ \hline SD(NPV) & 1,889,878.27 & Standard diviation & & \\ \hline CV & 1.27 & cofficient of variation & The higher CV, & the higher risk \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline SD & 7,136,520,378,971.06 & 1,598,272.50 & 7,150,035,941 & 1,850.57 \\ \hline \end{tabular}